ATT fearful of tax relief changes for UK homeworkers

4th January 2016 | News

The Association of Taxation Technicians (ATT) is concerned about government plans to change the rules on travel expenses for homeworkers across the UK.

The Government has suggested in a recent consultation that employees who work in multiple locations for more than 30 per cent of their working time should be allowed to choose which one of those locations or bases is their primary working base.

They would then be ineligible for tax reliefs for travel costs incurred on journeys between home and their primary working base.

Nevertheless, the Government is also proposing to stop homeworkers from selecting their home as their primary working base if they have a base elsewhere such as their employer’s headquarters. The move would thwart homeworkers from securing tax relief on travel to and from their home to their employer’s head office.

Michael Steed, president, ATT, believes that whilst the current tax relief regime for homeworkers is ‘sometimes complicated’, the new proposals would stop those who work from home and contribute significantly to the UK’s flexible labour market from securing any tax relief for travel costs to their employer’s offices.

“A good number of employees struggle to cope with a conventional 9am to 5pm office job either due to health or family reasons, whilst being able to recruit homeworkers can be vital for businesses which need to employ more staff, but do not have the space available to accommodate them,” said Steed.

“We would not wish to see any of these arrangements disturbed by a disadvantageous shift in the travel and subsistence rules.”

Mr Steed fears that many homeworkers will be punished by these latest proposals, losing out on legitimate business travel costs.

“This would leave either employers or employees out of pocket and could lead to some employees giving up their jobs,” added Steed.

“The Government already supports homeworking by allowing employees who choose to work at home to be given up to £4 per week tax free from their employers, to help with the extra costs of working from home.

“It feels like a backward step to consider denying tax relief on travel costs in this way, given the increased trend in homeworking.

“We urge the Government to consider carefully the implications of their proposals.”

To view the government’s discussion paper on the topic, click here.

Image: Kate Hiscock