HMRC Clarifies the Tax and National Insurance Position on Journeys Home from Work

Ordinary commuting journeys between a permanent workplace and home are private journeys for tax and National Insurance purposes and so if the cost of that journey is met by your employer it is a benefit in kind and tax and National Insurance Contributions (NICs) will be due. There are circumstances however, when an employee’s journey home from work late at night, paid for by their employer may be exempt from a tax and NICs charge. The draft guidance published today aims to clarify what those circumstances are and explains how to apply the criteria, which must be applied on each occasion, to decide whether or not the journey is exempt from tax and NICs.

Although not a formal consultation, HMRC is inviting views on the draft guidance published today. We would like to hear from you about whether the guidance now provides the necessary clarity to assist employers in the day to day application of the rules and we would like to hear your views on how you think the guidance could be made simpler to understand and apply in practice. The guidance will be available for comment until 11 September 2007, but HMRC will not be able to respond to comments or representations on an individual basis.

Please email your comments to: Paul Harris

DRAFT GUIDANCE (PDF 55K)
The current guidance on late night taxis is found in a one page brief – fewer than 10 lines – in the Employment Income Manual (EIM21731) listed under “L” in the benefits contents.

We intend to include the new guidance at EIM 21831 – 21834 under “T” for taxis and create a link to it from the current guidance at EIM21731.