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Return to Office and Hybrid Working

Dinesh Jangra, Partner, Global Practice Leader for Global Mobility
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As restrictions continue to be slowly eased and workers start to return to the workplace after many months at home, we assess how the new normal may look from an employment perspective, and the tax implications of this.

The last 15 months

Since the government announced in March 2020, that offices and workplaces should be closed and employees work from home, there have been numerous support packages made available.

For employees, the two key elements of support have been:

  1. Being paid by their employer or being able to claim tax relief on a fixed £6 per week allowance to cover the extra costs of working from home. HMRC relaxed the rules on this and allowed employees to claim for the whole of the tax years 2020-21 and 2021-22 as long as they worked from home for even one day in each period. (higher amounts can be claimed if supported by receipts). This is predicted to return to statutory criteria from April 2022 which means a formal homeworking arrangement must be in place (see below).
  2. Being able to purchase and be reimbursed for office type equipment to assist working from home. Typical items include monitors, printers, desks, chairs etc. Again, HMRC are allowing such arrangements for tax years 2020-21 and 2021-22. From April 2022, this concessionary treatment will cease. From then onwards, reimbursement as described above will be taxable. Employers can however provide equipment directly to their employees without any liability arising.

Returning to offices 

Employees have already started returning to the office/workplace and there is no doubt that this will continue. That said, most commentators acknowledge that post pandemic, the “new normal” may involve a combination of home and office working, in effect a new hybrid structure.

So that leads to the question of what or more importantly where, is an employee’s permanent workplace(s) versus a temporary one and what travel costs may be reimbursed without incurring a tax liability.


The concept of homeworking isn’t new and many employees have done so for years. However, it is important to distinguish between occasional/informal homeworking and a proper homeworking agreement.

In simple terms, where an employee is provided with office/workspace in which they are expected to work, then this is very likely to be their permanent workplace. If the same employee elects to work at home (or elsewhere for that matter) from time to time in an informal manner, then this does not change anything.

Typical examples would be choosing to take work home for an evening, or perhaps to complete a piece of work on a different day at home. In such cases, travel from home to the workplace is normally at the employee’s expense, but if reimbursed by the employer, would be a taxable benefit because this is ordinary commuting.

A formal homeworker is considered very differently. In this case, they are contracted to work from home full time and most likely would have a dedicated workspace within their home from which they work. Importantly, this cannot be at the request of the employee. The employer must initiate any such arrangement on the basis that no dedicated office space is available (present or future) at the firms offices/premises. Structured correctly, the home would become the permanent workplace and the costs of travel to any other workplace (of the employer or perhaps customers/clients) would not be taxable, if reimbursed.

It is worth noting at this point that as a result of the pandemic, many offices have downsized and employees no longer have a dedicated desk. When they do have to attend periodically for a temporary reason, they will have to find a spare desk (i.e. “hot desk”). For that reason, it may support the above statements that an employee no longer has any dedicated workspace, in effect, the crux of the new hybrid ways of working. But the employer has to initiate this… the employee cannot simply request.

The above is not overly difficult to digest and apply. However, things start to get potentially problematic when an employee splits their time between home and the workplace on a fixed or regular basis.

As has already been explained above, informal working from home does not change an employee’s permanent workplace. Working from home full time under a formal agreement, with occasional business travel also does not change the home as being the permanent workplace. But what about where an employee splits their time between both? 

We should first consider the definitions of permanent and temporary workplaces…

Ordinary Commuting

Ordinary commuting is considered by HMRC to be travel between a person’s home and their permanent workplace(s).  

Permanent and Temporary Workplaces

A place is a permanent workplace if the employee attends it regularly for the performance of the duties of the employment, and it’s not a temporary workplace. An employee attends a workplace regularly if their attendance is frequent, follows a pattern and is for most of the period they are likely to hold that employment.

A temporary workplace is somewhere the employee attends only to perform a task of limited duration or for a temporary purpose, even if attendance is regular.

So, now let’s apply the rules to some typical scenario’s employers are facing.

  1. Office Working

    Marcus is employed by ABC Ltd to work from its office permanently, as part of his job is office management. The office is a permanent workplace and when he travels there for normal working hours, this is ordinary commuting. Any travel expenses incurred during his journey to work are taxable if met, or reimbursed.
    Occasionally, ABC Ltd requires him to attend the office on a Saturday to oversee office development. As a result, Marcus incurs extra costs for the trip to the office which is outside normal working hours. This journey is still one to a permanent workplace, from a place that is not a workplace, so is considered to be ordinary commuting.
  2. Fixed Mixed Working

    Ted is employed by ABC Ltd on a permanent mixed working basis, whereby he comes into the office for work on Wednesdays and Thursdays and works from home on Mondays, Tuesdays and Fridays. As Ted uses the office to work on two specific days for every week that he is employed, his attendance is frequent, follows a pattern and this continues during the period in which he holds this employment. Therefore, he attends the workplace regularly. Similarly, Ted’s home is also considered a permanent workplace on Mondays, Tuesdays and Fridays. His travel from home to his employers office on Wednesdays and Thursdays is considered ordinary commuting. If ABC Ltd reimburses Ted for his travel expenses on these days, the costs would be taxable. However, HMRC guidance confirms that, where Ted is unexpectedly required to visit ABC Ltd.’s premises on a Monday, Tuesday or Friday to carry out the duties of his employment, he would be entitled to tax relief on his travel costs because he is travelling between two workplaces. 
  3. Agile Working

    Li Xiu is employed by ABC Ltd on a hybrid working basis. She lives close to the ABC Ltd office where there will always be a desk available for her should she attend. ABC Ltd expects her to come to the office sometimes to talk to the team and it is stipulated in the contract of employment that she must attend at least once a week. However, ABC Ltd is happy for her to work at home so she can choose to come to work in the office when it suits her.
    As Li Xiu attends the office regularly for the performance of the duties of employment and not for a temporary purpose, the office is a permanent workplace for her. So, whenever Li Xiu travels to the office, this is considered to be ordinary commuting. If ABC Ltd reimburses her for her travel expenses when she attends the office, this is taxable.
    Even if she comes into the office on a day where there is a team meeting or client meeting, her travel expenses are still taxable since this office is still a permanent workplace. This is because the office is available for her during all of her working hours, and the place from which she works is a personal choice.
  4. Formal Homeworking Arrangement

    Eve is employed by ABC Ltd on a permanent homeworking basis. She spends the bulk of her time working from home, but sometimes she has to travel to ABC Ltd.’s office for one off meetings, or perhaps a training course. Occasionally before or after meetings in the office, she will ‘hot desk’ to make efficient use of her time.
    While she can be allocated tasks here and carries out her normal duties of employment, this is not the reason she is there. The main reason she is there is for a one-off meeting, such as a face-to-face client meeting, a key element of her employment and something she cannot do at home.
    Because she only travels to carry out tasks of limited duration that necessarily can’t be performed at home, the office is not her permanent workplace. This means when she travels to the office for client meetings, this is not ordinary commuting, hence is a tax-deductible expense.
    Eve sometimes attends the office for a social event, such as a birthday celebration for a colleague. When this is the case, she is not travelling for work purposes, so it is private travel. Therefore, these costs of travelling are taxable if met or reimbursed by her employer. 


As has been highlighted, the rules on travel between workplaces vary, depending on their designation as permanent or temporary, as well as the reasons for attendance. HMRC legislation is also extremely strict on the allowability of such costs.

What should be made clear is that, if an employer isn’t reimbursing an employee for travel, then there really is no risk for the employer. An employee who works at home by choice and an employee working at home under a formal agreement, do not differ if they are not claiming any travel costs.

It is only where an employer intends to reimburse travel between home and a workplace (especially a pre-pandemic workplace) that care should be exercised.

If you would like assistance in checking which travel expenses are taxable, or adding them to your P11D and PSA forms before submission to HMRC, Crowe can assist. Please get in touch with your usual Crowe contact.

Contact us

Dinesh Jangra
Dinesh (Dino) Jangra
Partner, Workforce Advisory