Travel expenses and agency workers

Employment agency Reed has lost its appeal against a tax assessment for £158m in respect of its expenses scheme for ‘employed temps’.

The case concerned the tax treatment of temporary workers’ travel expenses. Expenses could be paid tax free to temps in respect of travel costs to locations other than their normal place of work. Under the temp contracts with Reed, their ‘normal’ work location was specified. When the temps were assigned to other workplaces, they were paid travel expenses tax free.

However, HMRC challenged whether these other places of work were temporary. If the payments were in respect of the temps travelling to their normal place of work, it was taxable as employee earnings…

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