Kevin Read reviews recent cases on temporary workplaces.
Travel to and from temporary workplaces is allowable for tax purposes for an employee. In the last edition, I discussed the law in this area. Now let’s look at some recent cases on the subject.
Paul Nowak v HMRC [2019] UKFTT 511(TC)
The appellant was an electrical engineer who lived in Pontefract but worked at various nuclear power stations across the UK over a five-year period for his employer. Crucially, he separately contracted with them to work at each specific power station.
Nowak paid 23p/mile for travel to a power station plus, for every second day off, for travel home and back to the power station. The employee claimed the difference of 22p/mile from the statutory mileage rate as an employment expense, on the basis that all the workplaces were ‘temporary’.
HMRC argued that work at each site was a separate employment, so the travel was ordinary commuting, not to a temporary workplace.
The First-Tier Tribunal (FTT) held that, as he was working at a single specified site for the whole of each contract, all travel was to a permanent workplace.
Had the work all been under one single employment contract, it is likely that the different sites would have been temporary workplaces.
Ratcliffe v HMRC [2013] UKFTT 420 (TC)
Similar issues arose in this earlier case. The taxpayer claimed mileage expenses in respect of travel to and from his places of work. He worked for his employer under three contracts. The first, a retainer contract, required him to work at various locations. The other two were short-term contracts that specified a single place of work. HMRC disallowed his claim for the two-short contracts on the basis that they related to permanent workplaces.
The FTT held that, although the work carried out was essentially the same under each contract, the contractual provisions determine the tax treatment. Under the short-term contracts, the employee was required to work at one location for the duration of their contract, so that location could not be a temporary workplace.
Narinder Sambhi v HMRC [2020] UKFTT 7717 (TC)
This case dealt with the issue of when different workplaces situated close together should be regarded as one. The FTT had to address whether s339(7) ITEPA 2003 applied. This says that, when determining where a temporary workplace is, you should ignore any modification of the place at which duties are performed if it does not, or would not, have any substantial effect on the employee's journey, or expenses of travelling, to and from the place where they are performed.
Narinder Sambhi lived in Birmingham and for several years was required to work at sites around Birmingham. From September 2013 he worked in London, living there from Monday to Friday each week. During this time, he lived in Ilford and Walthamstow (East and North-East London respectively) but most of his work was either in south or central London.
He believed that each site qualified as a temporary workplace, so claimed relief for his travel and subsistence. He had not worked at any of the sites, individually, for more than two years.
HMRC disallowed the claims (totalling £20,000 in 2015/16 and 2016/17), arguing that his work at all the sites in Greater London should be viewed as work at one site. In total, that work had exceeded two years.
The FTT found that the journey times to each site from his accommodation differed by no more than half an hour and the cost varied by no more than £14, so (in the Tribunal’s view) the change of worksites was not substantial. His work at various sites in Greater London should therefore be treated as one workplace, which had become a permanent workplace.
