EIM32135 - Travel expenses: travel for necessary attendance: personal service companies

Sections 338 and 339 ITEPA 2003

It is not uncommon for an individual who would be an employee if engaged directly by a client to provide his or her services through an intermediary such as a personal service company. In a typical arrangement the service company would employ the individual and contract to supply his or her services to the client. This arrangement created certain tax and NICs advantages that are tackled by the intermediaries legislation, see ESM3012 onwards.

Where the individual is continuously employed by the service company and undertakes contracts for clients of the service company in different places, he or she will commonly be able to deduct the cost of travelling to and from the client's premises. This is because the client's premises can be treated as a temporary workplace provided that the individual does not expect to be there for a period of continuous work exceeding 24 months, see EIM32080. The contracts between the service company and the client cannot be treated as separate fixed term appointments of the individual. This treatment is not affected by the intermediaries legislation, see ESM3224.

This is illustrated by example EIM32136.

The individual may also carry out some part of his or her duties at home as well as working at client's premises. The guidance at EIM32170 explains the effect of accepting that the individual's home is a workplace. Guidance on how to determine whether the home is a workplace is at EIM32760 onwards and this is applied to service companies at EIM32800.