HMRC has clarified tax rules on commuting for hybrid and remote workers

In a recent statement, HM Revenue & Customs (HMRC) has clarified travel from an employee’s home to their base office under a hybrid working arrangement does not qualify for tax relief.

As hybrid working arrangements continue to be common for office-based workers, many have argued that journeys to the office should be classed as a ‘journey in the performance of the duties of employment’.

These travel expenses typically qualify for tax relief for employees on costs incurred as a result of carrying out essential duties.

However, commuting to and from the workplace – unless it is a temporary workplace – does not qualify for tax relief.

In an explanation of the updated guidance, HMRC stated that an employee’s home is down to their personal choice – meaning the cost of travelling between home and work is a personal expense, ‘not an objective requirement of the job’.

However, HMRC further clarified that, when an employee performs ‘substantive’ duties from home, such as on a primarily remote contract, then they may be entitled to tax relief of costs for travelling to the office.

If such travel is for the purpose of the performance of duties, such as if it is contractually obligated, then tax reliefs on costs incurred may apply at a rate of:

• 45p for cars and vans – for the first 10,000 miles each tax year
• 25p for cars and vans – for each mile over 10,000 miles each tax year
• 24p for motorcycles
• 20p for bicycles

HMRC provides a quick and accessible tool to check whether you are eligible to claim relief on expenses incurred through carrying out your work.

For advice on claiming tax relief on expenses incurred through carrying out your work and eligibility, please contact our expert team today.