The Future of Work: How Evolving Travel Policies Are Changing Employee Expenses
The way we work has changed dramatically in recent years, with hybrid and remote models becoming the norm across the UK. As a result, traditional business travel and commuting expenses are being redefined.
Recent updates from HM Revenue & Customs (HMRC) clarify that travel between an employee’s home and their permanent workplace is considered ordinary commuting—and therefore not eligible for tax relief. This has major implications for employees, businesses, and how workplace contracts are structured.
How Are Work Travel Policies Changing?
The shift towards flexible working means that employees are splitting time between home and the office. However, HMRC’s stance means that even if an employee works from home part-time, their commute to an office is still seen as personal travel, not a business expense.
For businesses and workers, this raises key questions:
✅ What qualifies as a "permanent workplace"? If an employee works from home most of the time, can their office still be considered a primary place of work?
✅ Who should bear the cost of hybrid commuting? With commuting no longer reimbursable in many cases, should employers increase salaries or provide travel allowances?
✅ Are existing travel policies still fair? Many company policies were designed for pre-pandemic work structures. Now, they need revisiting to reflect hybrid and remote work realities.
The Impact on Employers and Employees
🔹 For Employers: Companies must ensure that employment contracts clearly define the workplace. If an employee’s home is officially their main workplace, travel to other locations may be tax-deductible. However, if the office remains the primary workplace, travel costs remain the employee’s responsibility.
🔹 For Employees: Many workers are seeing their travel expenses increase without additional support from employers. This could lead to calls for revised mileage rates, travel stipends, or tax relief adjustments to help hybrid workers manage costs.
Are Travel Expenses Keeping Up With Modern Work Trends?
There is growing debate over whether current travel reimbursement rates and tax policies are outdated. The Association of Taxation Technicians (ATT) has argued that mileage reimbursement rates, unchanged since 2011, are leaving workers out of pocket.
In industries where employees frequently travel for work—such as social care, sales, and consulting—outdated policies mean employees are effectively subsidizing their own business travel.
What’s Next?
With more UK companies shifting to hybrid models, we may see changes in how travel expenses are handled, including:
🔹 A reassessment of mileage reimbursement rates to reflect rising costs.
🔹 More travel allowances or stipends for hybrid workers.
🔹 New tax policies to support flexible work models.
🔹 Revised employment contracts that clearly define permanent workplaces.
Final Thoughts
The move towards hybrid work is reshaping corporate travel policies. As HMRC tightens tax relief rules, employers and employees must adapt to new commuting realities. Whether through updated contracts, travel allowances, or policy reforms, the future of work demands a fresh look at who pays for travel and how employees are supported.
