2016 - Temporary Workers Travel Expenses – No Change Despite the Rumours

Karen Weston, Senior Manager at Aspire Business Partnership comments on the danger of Chinese whispers;

I have had a flurry of queries this week regarding news that the payment of travel expenses to temporary workers is now back on the agenda.

These queries come on the back of a couple of articles which include encouraging statements such as “music to your ears” and “Great news, today that landscape has changed…”.

I will apologise in advance for bursting anyone’s bubble but the case that these articles refer to (Federacion de Servicios Privados v Tyco) was heard by the Court of Justice of the European Union over a year ago and its impact on the expenses legislation is unchanged.

What was the outcome of the case?

The case identified that the travelling time of workers who have no fixed place of work between home and their first appointment and their last appointment and home constitutes working time, in accordance with the Working Time Directive.

How does that affect us?

Although the case was heard in the European Court, the content of the Working Time Directive has to be regarded by the UK courts in relation to their interpretation of the Working Time Regulations 1998. 

The case identifies that workers without a fixed workplace should be paid from when they set out from home until when they return after completion of their duties. 

The decision is relevant to working time but not to pay and so, leaves employers to decide the level of pay that is appropriate for these periods of travel time.  Notably, the National Minimum Wage Regulations 2015 state that the hours spent travelling between a worker’s home and place of work do not count as either time work or salaried hours for NMW purposes.

Employers must take care that, when counting these periods as working time, they still have appropriate regard to the length of the working week and the requirement for rest breaks etc.

Where such workers travel in the performance of their duties – which they will now be doing as they will effectively “clock-on” when they leave their home – they can claim reimbursement of the travel expenses that they incur without these payments being subject to tax.  This entitlement is afforded by section 337 Income Tax (Earnings and Pensions) Act 2003.   This section of the taxes act was not impacted by the changes that came into effect in April 2016 which instead, apply to workers engaged via an intermediary who are working at a temporary workplace.

Summary

• Peripatetic workers who have no fixed workplace should be paid for the period of travel between;

their home and first appointment; and

their last appointment and home

• There is no requirement to pay these periods at NMW rates (yet!)
• Peripatetic workers will now be able to claim reimbursement of travel expenses incurred during these periods and those payments will not be subject to tax
• Workers who are engaged via an intermediary, provide a personal service and are subject to the right of supervision, direction or control in the provision of their services can only claim tax relief on travel expenses in very specific circumstances