When employees are called-out from their homes to attend to an urgent or emergency situation at work, the journey to the work premises and back is nearly always treated as a commuting journey. It is well established that the cost of travelling from home to the normal place of work is not travel in the performance of the duties. The expense incurred only puts employees into a position where they are able to perform their duties.

The situation is the same if the employee is contractually required to be at home on standby-duty or gives advice on the telephone before setting out for work. Those circumstances do not turn the employee's home into a permanent or temporary place of work.

As a result,

• if the employer reimburses the employee's expenses in full, the payment is liable for both PAYE tax and Class 1 NICs through the payroll, at the grossed-up value, or
  
  
• if the employer does not reimburse the expenses, the employee cannot claim a deduction of earnings in order to obtain tax relief.

There are two possible exceptions to this rule.

1. If the employee is called-out to attend a place of work other than the employee's permanent place of work, the home to work journey is treated as a business journey.
   
   
2. If the employee is called-out to attend the employee's permanent place of work, the home to work journey is treated as a business journey if
   
   
   • the employee's home is a normal place of work for the employee and
     
     
   • the employee begins to give advice on handling the emergency before starting the journey, and
     
     
   • the employee becomes fully responsible for those aspects of the situation that are required of the employee from that time, and
     
     
   • the employee must have a continuing responsibility for the emergency while travelling to the workplace.
     
     

The second of these situations will apply rarely. The rule is based on a 1969 House of Lords decision in the case Pook v Owen and is HMRC's interpretation of the very specific circumstances of the hospital doctor in that case.

If either of these two situations apply, and

• if the employer reimburses the employee's expenses in full, the payment is reported on form P11D (unless the employer has a dispensation that covers the situation) and there are no Class 1 NICs liabilities, or
  
  
• if the employer does not reimburse the expenses, the employee may claim a deduction of earnings in order to obtain tax relief.

...back to 2 March 2006

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