Homeworking - commuting to local office?

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We're looking to reduce our office space and designate more staff as formal "Homeworkers". What we plan on doing is to reduce the square footage of our London office by one-third. This will save us >£1m in rent. Some staff will still need to be "office based" but possibly 80% can be designated as homeworkers and will only need to come into the office 1 or 2 days per week (mainly for things like team meetings, client meetings)

As they will be designated homeworkers will the costs of this travel be "claimable" on expenses or will HMRC regard it as their ordinary commute (seeing as they're going in 1/ or days per week every week to the office where they were previously based)?

I hope that makes sense. All comments/suggestions welcome

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bhstewie said:

Out of curiosity do you think anyone would claim?

I'm in a similar position and from my perspective I've saved a fortune on petrol and couldn't see myself even thinking of trying to claim if I had to drive in once or twice a week rather than 5 days a week.

Very valid point. We don't think any of the current staff would (for the reason you mention). It's when NEW people join the company and assume that HMRC rules are applicable. You then run a risk of newbies submitting claims and the existing staff submitting backdated claims.

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Thanks all

That was broadly my understanding as well. We'll just have to officially NOT make them homeworkers.

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Thanks all - our Tax Advisor has replied. He has basically echoed Quinny's post below.

quinny100 said:

There is a fairly lengthy HMRC document on this: https://assets.publishing.service.gov.uk/governmen...

There is no straight answer, and designation of being a "homeworker" doesn't necessarily make any difference. it is entirely possible to have multiple permanent places of work in HMRC's eyes.

There is a well publicised tax tribunal case of a Dr Samadian - the very edited highlights were he worked at an NHS hospital, but did private clinics at other locations on a regular schedule. HMRC claimed that travel between his home or the NHS hospital and the private clinic locations was commuting as these were permanent places of work. If however he went from the NHS hospital to home to collect a patient file, then to the priviate clinic that would be business travel and not subject to tax. HMRC won.

The employer can pay their employees whatever expenses they like - the issue is whether those expenses are taxable or not.

When I read this document a while ago it seems to hinge on the purpose of the visit to the office. If you are going to perform a specific task that is required to be performed at that location, eg. a customer meeting, collect or deliver goods or paperwork etc, then that is not taxable.

If you're in sales and all the sales staff come into the office every Friday to meet their manager and network with other team members, then in HMRC's view the office is a permanent place of work and the journey is normal commuting and is taxable.

Routine is not necessarily a deal breaker though. For example I know of a case where member of staff has to do a 200 mile round trip to attend a premises every Monday to change backup tapes. As he is going to the location to perform a specific task that can only be done at that location, that is not taxable.

You don't work for a "Quite large but not Big 4"Accountancy practice do you?

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anonymous said:

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We've got about 12 regional offices. If people were travelling to an office where they weren't normally based then T&S would be paid.

What we don't want to do is to let everybody WFH and then they start claiming T&S for coming into the office where they used to be based. And based on the guidance it looks like they can't do this unless it's extremely rare/ad-hoc.

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Burrow01 said:

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Thanks all

That was broadly my understanding as well. We'll just have to officially NOT make them homeworkers.

So you are happy to save £1m in rent, but not pay out a bit for peoples travel expenses?

We're happy to save £1m in rent and try to avoid incurring any costs we don't need to.

Is that a bad thing? Bear in mind the Employees will be saving somewhere between £2k and £7k in commuting costs so we think it works for both of us.

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anonymous said:

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Didn't see this

Yes that's what we're doing / have done. What we are trying to avoid is a situation where staff believe they are contractually homeworkers and therefore entitled to claim costs for travelling to their current office. So we are just going to say you can WFH but you're not formally Homeworkers.

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Burrow01 said:

Fair enough, but it does seem to be a bit penny pinching, what would be the costs for a years expenses?

It's hard to say - let's say 10% of the staff turned up on any particular day and claimed £10 travel costs. So that would be 20 x £10 x 220 days per annum = £44,000. Then you have the 10 other regional offices where staff would argue that if London staff get home to office expenses it, they should get it as well. Then, on top of that, if HMRC decide it's a taxable benefit you would need to add on 20%/40% depending on what peoples' marginal tax rate is.

All in all, it would just be a PITA so, given that staff who WFH even 1 or 2 days per week will be better off, and nobody should be worse off , I think we'll just be better off having a policy that states nobody can claim.