EIM10080 - Employment income: travelling and subsistence payments: home to work travel of disabled persons

Section 246 ITEPA 2003

There is no tax charge when a disabled employee is provided with the means of travelling between home and work, or has the cost of their home to work travel paid for or reimbursed.

For 2002/03 and earlier years, exemption was provided by Extra-Statutory Concession A59 (see SE10080).

For 2003/04 onwards, the former concession has been replaced by a statutory exemption in Section 246 ITEPA 2003.

Section 246 does not apply to the provision of a car, but there is a separate exemption which applies when an employer provides a disabled employee with a car for home to work travel (see EIM23660 onwards).

For the purpose of the exemption in Section 246, "disabled employee" means an employee who has a physical or mental impairment that has a substantial and long-term adverse effect on the employee's ability to carry out normal day to day activities (Section 246(4)).

This definition of “disabled employee” draws on the definition of disabled contained in the Disability Discrimination Act 1995 (DDA). However, when considering whether the exemption applies you must focus on the section 246 definition rather than the more detailed DDA legislation which is concerned with the prevention of discrimination against employees on account of their disability.

There are a number of conditions that will not qualify for tax exemption under section 246, although they are included in the DDA to prevent discrimination by employers. The conditions that do not qualify for tax exemption are where employees:

• have a recurring disability which may be in remission, where the impairment ceases to have a substantial adverse effect but it is more than likely that the substantial adverse effect will recur in the future. Conditions specifically mentioned within the DDA include multiple sclerosis, HIV and cancer.
• have had a disability as defined by the DDA Act in the past but are no longer disabled or have since recovered
• have an impairment and may be receiving medical or other treatment which alleviates or removes the effects (though not the impairment). In such cases, the treatment is ignored and the impairment is taken to have the effect it would have had without such treatment. This does not apply if substantial adverse effects are not likely to recur even if the treatment stops (i.e. the impairment has been cured).

An employee who has previously had a disability covered under DDA but who is able to carry out normal day-to-day activities at the time an employer is providing the employee with the means of travelling between home and work, or is reimbursing the cost of their home to work travel will not meet the terms of the section 246 definition.

As regards expenses claims by disabled persons who do not receive payments in respect of travelling expenses, see EIM32356.