SE62635 - Tax treatment of engineering design employees: guidelines issued by the Federation of Engineering Design Companies - taxation of travelling expenses

7. Travelling

a. If a person is normally (i.e. for an extended period) employed at his employer’s premises and on occasion is sent out temporarily to another location for a brief period for business purposes, the expense of such travelling will qualify for a deduction under Section 198(1) ICTA 1988, and so the reimbursement of this expense can be made without deduction of tax.

One example of such a situation would be where an employee is in fact normally based at his employer’s offices, spending, say all but a few weeks there a year; in the remaining period(s), he is sent to one or more client’s premises, to work or to supervise others. Whilst on the client’s premises, he is in a real sense absent only temporarily from what is his normal place of employment, so that payments for the additional travelling expenses he incurred in the period(s) spent away could be made in full.

The essential factor here is the existence of a normal place of employment from which there are brief absences and to which the employee returns following the period of secondment. Whether there was a normal place of employment at the Federation member’s own premises would depend on the extent to which individual employees actually worked there. Generally, the period spent at any one site is less important than the overall pattern of an employee’s activities, as the crucial point is whether he spends the greater proportion of his time working at his employer’s offices rather than elsewhere. The Revenue would regard a brief absence in this context as being for a period of not more than twelve months away from the normal place of work. This limit may not be exceeded in any circumstances, and if an employee remains away on contract for more than this length of time, the allowance he receives must be taxed (see paragraph d. below [ SE62650]).