Travel Expenses

[TheLongGloriesOfTheWinterMoon]

Can anyone point me to somewhere with the legalities of this situation?

Along with about 20 other people, every year I do a one month contract on a fixed term, temporary basis. I've been doing it every year since 2014.

Before the actual job starts, we have to attend a one week induction. Our board is paid for that week. And we also get paid for the week. No issues there. We don't get paid to travel to the induction, and never have. We've never questioned it. A series of changes put in place by the new accountant though, is making us all want to clarify a few things...

When the induction is over, we all go off to different towns. Our travel from the induction town to the town in which we work has always been reimbursed. Mine is fairly paltry- my centre is the nearest to HQ and my ticket costs about a tenner. Others however have a much longer journey (3 hours in some cases)

This year, we have been told we won't be reimbursed for the travelling expenses as it's "illegal in the UK to pay someone to get to work". That's a direct quote from the accountant.

We've also previously been paid weekly. Lots of students do this job alongside us, and as you can imagine, being paid weekly has always been helpful. This year, again, we've been told that paying people weekly is "illegal in this industry" (the industry being summer English courses for international students) as if we were paid weekly, they'd have to issue 4 separate weekly contracts, AND give us holiday between each contract.

So we are being paid monthly. Not a huge problem, we are awaiting the final payment (our contracts say 25th August, then we received an email from the (new) accountant saying the pay date has moved to 31st. 🙄

Thanks for reading, and any link to relevant legislation is much appreciated!

https://www.gov.uk/guidance/ordinary-commuting-and-private-travel-490-chapter-3

3.1

An employee cannot have tax relief for the cost of a journey which is ordinary commuting or private travel. The following paragraphs explain what these terms mean.
Ordinary commuting3.2The term ‘ordinary commuting’ means any travel between a permanent workplace and:

• home
• any other place which is not a workplace

A workplace is a place where the employee’s attendance is necessary for the performance of the duties of that employment. The meaning of permanent workplace is explained at paragraph 3.10. For most employees this means that ordinary commuting is the journey they make most days between their home and their normal place of work. However, for some employees the position is more complicated.

Looking at the National Insurance Manual I am not sure if there is any legislation on the timings of payments

https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim08020

1. Home

HMRC internal manual National Insurance Manual From: HM Revenue & Customs Published 11 April 2016 Updated: 2 August 2023, see all updates Search this manual

1. SearchContents
2. NIM01000CO
3. NIM08000

NIM08020 - Earnings Periods: Earnings paid at regular intervals: Interval of payment: General Regulations 3(1) of the Social Security (Contributions) Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

If the employer pays the earnings at regular intervals, only the interval of payment matters, not the period over which the earnings accrued. It is the period in which an employee is paid rather than the period the earnings cover. The most commonly applicable provisions can be summarised as follows:

• where any part of an employee’s earnings are normally paid at regular intervals of:

one week or less, the length of the earnings period is a week; or
more than one week, the length of the earnings period is the length of the intervals.

The definition of ‘regular interval’ for the purposes of regulation 3 includes only such intervals as are:

in accordance with an express or implied arrangement between an employed earner (the employee) and the secondary contributor (normally the employer) which provides the intervals at which payments of earnings normally fall to be made and
the intervals are of substantially equal length.
The contract of employment will normally specify the period between which the payment of earnings will be made.
Example

For an earner whose pay is calculated by reference to a weekly wage but who is paid regularly every second week, the earnings period is 2 weeks, the first such period beginning on the first day of the tax year.

The following table sets out examples of how the earnings period rules work if the employee is paid regularly:

Paid same day each week The earnings period is a week
Paid twice weekly, eg on Tuesday and Friday The earnings period is a tax week and the earnings must be aggregated
Paid once a month The earnings period is a month
Paid once every fortnight The earnings period is two weekly
Paid once every two months The earnings period is two monthly
Paid once a year The earnings period is annual

Its all a little wordy and I am not a lawyer / employment expert.

Re travel, you/they should have a base, either an office or home - and then thats where your travel is calculated from? I think

Apologies if my links confuse rather than help

Thanks for your swift reply! We'll sit and have a look through it all.

You mention it is a 1 month contract. Are you contracted as an employee - as in paid via PAYE - or as an independent contractor?

If the latter there is no need to pay you anything that you don't negotiate as part of the contract.

We're all PAYE.

Did the accountant actually tell you it was illegal, or is the employer telling you that that is what the accountant said?

Weekly payroll is a pain, as it is time consuming and costs the employer a lot of extra money in terms of payroll bureau fees

Regarding travel costs - you can't claim from home to normal place of business - it's not illegal, but it would be taxable

It isn't "illegal to pay somebody to get to work". If an employer wants to pay travel costs, they can, but travel to the usual place of work cannot be paid as a tax free expense, it would simply be additional remuneration, taxed in the normal way.

The employer should pay travel expenses (untaxed) for travel to places that are not the employees usual place of work, so on that point it depends what your contracts say.

The change to payroll is quite reasonable, although it was not previously illegal, just inefficient.

The accountant.

This is why all of us are a bit hmmm. We appreciate that weekly payroll is more work for them, and tbf, it's not a massive issue for any of us except maybe your students. It's just this guy's way of closing down any requests for clarification.
(To give a further idea, before starting this year, I received 4 differently worded contracts- I honestly think the guy doesn't know what he's doing. All but the last one were wrong. And corrected only when I pointed it out. There are 4 of us who should have exactly the same T&C and money at the end and all 4 of us had something different. 😳 )

Regarding the travel- I suppose it comes down to the normal place of work and if that's their HQ or where we are then sent. As I said, I'm not too fussed- mine was a tenner, but the poor sods who had to pay to get from Kent to Cornwall were not best pleased. Especially as in the past it's always been reimbursed.

It is not illegal to pay weekly, but payment terms are the decison of the employer - if they say monthly then you accept it or don't work for them. It is even possible, with notice, to change payment terms whilst someone is in employment, and this is far from uncommon. So if they are offering pay monthly then you accept it or find other work.

It is not illegal to pay for expenses - but nor does an employer ever have to offer any expenses either! In terms of the commute distance, he is semi-correct - if you are paid for travel from home to work this becomes a taxable benefit. But people often assume that employers must pay work travel expenses. They don't have to. Again, it is about the terms - if the employer doesn't offer expenses there are ways to claim some allowances against tax, and if they do offer them they must do so within the tax regulations. I believe that you possibly may be able to claim the tax relief on the jpurney from your induction to your workplace (assuming that the workplace is residential too, so there is no home to work mileage in the mix) but to be honest unless you have a large cost I wouldn't bother as it is more faff than the pennies are worth!

Thank you!
As I said, it's not so much for me, or even the actual changes, it's more them confidently closing down any requests for clarification as "because it's illegal".

The use of 'illegal' is nonsense. In fact, to quote a former colleague, it's bollox.

When we worked in an office and were sent for a course, you got your travel costs paid either at second class rail or mileage.

If the employer pays your costs to travel to your ordinary place of work then that's a benefit and is taxable in your hands. Not illegal but you're in territory where it needs to be reported to HMRC.

For that reason it could get complicated if there was a partial overlap with your journey to a training centre and that to the office but generally not.

Widespread WFH has made it a bit more complicated but it's not insoluble.

Payment frequency is, in theory, a matter for negotiation. Perfectly possible to be weekly paid and have leave etc calculated annually.