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HMRC updates their business travel guidance

6 September 15 | By: Jas Jhooty


HMRC have recently updated their Booklet 490 – Employee travel guidance.


When the Booklet 490 was first published in 1998, it introduced the concept of ordinary commuting and superseded the previous concept of triangular travel i.e. a business journey would only be allowable if it was the shorter of the following two journeys: –
  • between the employee’s home and their temporary workplace and
  • their normal place of work and their temporary workplace

The booklet also clarified HMRC’s stance on travel to temporary workplaces allowing for an extension to the previous 12 month rule to the current 24 month rule. However despite these positives, the Booklet 490 was heavily criticised for containing many contradictory examples and for being too London-centric.

The Office of Tax Simplification identified the old Booklet 490 as being very much out-of-date and recommended that it be updated to provide greater clarity for employers.

HMRC have now done this and the updated Booklet 490 was published in late August 2015.

What’s new

The Booklet 490 has been completely overhauled and modernised taking into account new business practices such as homeworking that have become much more prevalent over the intervening 17 years since the original guidance was first published. The examples are also much clearer and serve well to illustrate HMRC’s intentions behind the meaning of a particular business travel rule.

The new Booklet 490 also provides good references to other relevant HMRC guidance and so presents a one stop place for employers to get advice on whether a particular journey can qualify for tax relief.

The new restrictions on travel incurred by agency workers have also been incorporated as well as advice on how to treat travel for fixed-term appointments.

Other areas of improvement include better explanations of: -
  • whether or not travel qualifies for tax relief
  • temporary worplaces
  • ordinary commuting and private travel
  • tax rules for foreign travel
  • other associated travel costs e.g. Incidental expenses and subsistence

Interestingly there is a much enhanced section on employer compliance which demonstrates the greater emphasis HMRC is placing in this area.

What remains unchanged

HMRC’s underlying rules on business travel remain unchanged. There is a separate consultation underway on revamping the way Travel and Subsistence costs are to be handled for tax purposes. Employer’s record-keeping requirements are also explained in-depth. This is to fit in with next year’s automatic dispensation regime.

How emTax can help

We welcome the publication of this long overdue updated Booklet 490. We are pleased to report that it is much better than the first iteration and can provide answers to most employer queries on what business travel can qualify for tax relief.

If this new guidance is followed, compliant employers will be much safer from any future HMRC enquiries. Please do not hesitate to contact us if you require any assistance in understanding the advice contained within the new Booklet 490.


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