One thing that doesn't alter is the tax treatment of a commute to work. Home to office travel is non-deductible unless you are fully home-based.
Once at the office (the rules are the same whatever your workplace) you may have to go out on business. Travel expenses? That's valid business travel and costs will be deductible, or no benefit will arise if the employer reimburses the costs.
But what if you go direct from home to see the customer? Strictly that's home to work, which is non-allowable. The Inland Revenue is generous though (well, it is here). It operates a "lesser of" rule. You can claim the lower of the travel from office to customer and home to customer. Suppose you live in Beverley and commute to Hull, some 12 miles. If you go from home to Bridlington - 25 miles, say - Hull to Bridlington would be 30 miles. So you claim the lesser - 25 miles (each way presumably) is allowable.
There are winners and losers. A manager who works with me commutes from Southampton to London, 75 miles each way. He drives to St Albans one day, direct from home, say 85 miles. From London, that's 20 miles, so he only gets allowable travel expenses of 20 miles each way.
The Revenue's new rules simplify matters in many ways. From April you will get all the costs of business travel. That means the Bridlington trip is 25 business miles and the St Albans one is 85.
But you have to deduct any saving you make from not doing your "ordinary commuting".
Suppose the daily trip to Hull is made by car. Thus by going straight to Bridlington you've saved the 12 miles so the claim can only be for a business trip of 13 miles each way (ie 25 less 12). On the other hand if we suppose my manager has a season ticket to come into London he makes no saving if he drives straight to St Albans. So his claim is 85 miles each way - he's better off.
This rule operates on a daily basis. If you were to get sent off for a week's trip, so that you travelled to the site on Monday, stayed in a hotel for four nights and travelled back on Friday, that could lead to claims along the lines of: actual travel expenses pounds 50, hotel expenses pounds 200, less five commuting savings of pounds 15 per day equals net claim of pounds 175 rather than the pounds 250 you may claim now.
It's up to the employer to operate these rules. Problem: does everyone always travel to work in the same way? But if they carry on reimbursing as before, employers may be creating a taxable benefit for some staff.
People who are site-based do better. Their travel costs will almost all be allowable, as will those of sales reps who have what are known as "travelling appointments". The office-based person may well lose out. That many will view any saving when not paying for their ordinary commute as recompense for an uncomfortable and tiring business trip cuts no ice with Revenue officials.
John Whiting is tax partner at Price WaterhouseReuse content