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Late night taxi for an employee

4 July 2024

Employers have a duty of care to ensure employee wellbeing, which can include providing transport home during unsocial hours. While usually taxable, a special exemption applies for occasional late work. However, tax relief doesn't apply for voluntary late work, regular late work, or if the employer doesn't reimburse travel expenses.

Employers don’t have a specific requirement to provide employees with transport home. However, they do have a duty of care to their employees, which means they should take all reasonably possible steps to ensure their health, safety, and wellbeing.

This duty of care could include ensuring that an employee gets home safely during unsocial working hours. In these situations, employers often pay for a late-night taxi for an employee to travel home from work. This can also occur when a car-sharing arrangement breaks down.

Usually, when an employer provides free transport or pays for an employee’s journey between home and a permanent workplace, it’s a taxable benefit. However, a special tax exemption is available for employees required to work late ‘occasionally’.

This exemption applies only when:

  • The employee must work later than usual and until 9pm or later.
  • The occasions are irregular.
  • By the time the employee finishes work, either public transport has stopped, or it would not be reasonable to expect the employee to use public transport.
  • The transport is by taxi, hire car, or similar private road transport.

There’s also an overall maximum allowance of 60 qualifying journeys in a tax year. Employees who choose to work late, regularly work late, or whose employer does not reimburse travel expenses, cannot receive tax relief.

Source: HM Revenue & Customs Tue, 02 Jul 2024 00:00:00 +0100

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