The Covid-19 pandemic fundamentally changed how many employees work and working from home became the norm. Since the pandemic, many employees have  partially returned to the office – their working week being split with some days spent in the office and some working from home. 

To reflect this shift to ‘hybrid’ working patterns, HMRC have updated their guidance on ordinary commuting and private travel with a new example explaining the tax treatment of commuting costs incurred by hybrid workers

To summarise:

  • Travel between home (or a temporary alternative, such as staying overnight with friends or family) and a permanent workplace is classed as ‘ordinary commuting’ and no tax relief is available for the costs incurred. 

  • Hybrid workers commonly choose to split their working week between home and the office (or equivalent place of work).  They might work flexibly with three days in the office and two spent working from home. 

  • The home of the hybrid worker does not become a ‘workplace’, primarily because of the flexible nature of their working arrangements. The office (or equivalent site) will remain the employee’s permanent workplace (assuming the employee goes to the office on a regular basis and performs duties there which are not temporary).
  • This means that no tax relief is available for travel between home and the office and any reimbursement of (or payment for) those travel costs will be liable to income tax and national insurance.

It is also worth noting that hybrid workers are unlikely to qualify for any tax relief for additional domestic costs of home-working as they generally choose to work from home for part of the week but have alternative working facilities elsewhere.