Exemption or deduction for travel expenses2
1
In Part 4 of ITEPA 20032 (employment income: exemptions), in Chapter 3 (other transport, travel and subsistence), after section 241 insert—
241ATravel by unpaid directors of not-for-profit companies
1
No liability to income tax arises in respect of a sum if or to the extent that it is paid wholly and exclusively for the purpose of paying or reimbursing travel expenses in respect of which conditions A to C are met.
2
Condition A is that—
a
the employee is obliged to incur the expenses as holder of the employment, and
b
the expenses are attributable to the employee’s necessary attendance at any place in the performance of the duties of the employment.
3
Condition B is that the employment is employment as a director of a not-for-profit company.
4
Condition C is that the employment is one from which the employee receives no employment income other than sums to which Chapter 3 of Part 3 applies (expenses payments).
5
In this section—
a
“director” has the same meaning as in the benefits code (see section 67), and
b
“not-for-profit company” means a company that does not carry on activities for the purpose of making profits for distribution to its members or others.
241BTravel where directorship held as part of trade or profession
1
No liability to income tax arises in respect of a sum if or to the extent that it is paid wholly and exclusively for the purpose of paying or reimbursing travel expenses in respect of which conditions A to D are met.
2
Condition A is that the employee is obliged to incur the expenses as holder of the employment.
3
Condition B is that the employment is employment as a director of a company.
4
Condition C is that the employee carries on a trade, profession or vocation (alone or in partnership).
5
Condition D is that, in calculating the profits of that trade, profession or vocation for income tax purposes, a deduction is allowed under ITTOIA 20053 for the expenses, but no such deduction is to be made.
6
In this section “director” has the same meaning as in the benefits code (see section 67).
2
In Part 5 of ITEPA 2003 (employment income: deductions allowed from earnings), in Chapter 2 (deductions for employee’s expenses), after section 340 insert—
340ATravel between linked employments
1
A deduction from earnings from an employment is allowed for travel expenses if conditions A to E are met.
2
Condition A is that the employee is obliged to incur and pay the expenses.
3
Condition B is that the travel—
a
takes place within the United Kingdom, and
b
is for the purpose of performing duties of the employment at the destination.
4
Condition C is that the employee has performed duties of another employment at the place of departure.
5
Condition D is that—
a
at least one of the employments is as a director of a company (“company X”), and
b
the other employment is also with a company (“company Y”) but not necessarily as a director of it.
6
Condition E is that the employee was appointed as a director of company X because company Y, or a company in the same group as company Y, has a shareholding or other financial interest in company X.
7
This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).
8
In this section—
“director” has the same meaning as in the benefits code (see section 67), and
“group” means a company and its 51% subsidiaries.