Commuting, Hybrid Working and Tax Relief: What You Can and Cannot Claim in 2026/27

The Fundamental Rule: Ordinary Commuting Is Not Tax-Deductible

The starting point is unambiguous: travel between your home and your permanent workplace is not tax-deductible. This is one of the longest-established principles in UK employment tax and it applies to every mode of transport, every type of employee, and every working arrangement including hybrid and flexible working.

The rationale, established in case law dating back to the 1930s, is that the location of your home is a personal choice, not a requirement of your employment. HMRC's position -- confirmed repeatedly in tribunal decisions -- is that it is not the nature of the job that determines the deductibility of travel, but whether the journey is in the performance of the duties of the employment.

For most employees with a fixed office location, commuting is simply not "in the performance of duties." It is a journey to a place where duties will be performed.

The 24-Month Temporary Workplace Rule

The major exception to the ordinary commuting rule is the temporary workplace. Under sections 338 and 339 of the Income Tax (Earnings and Pensions) Act 2003, travel to a temporary workplace can qualify for tax relief.

A workplace is temporary if:

• You are not expected to work there for more than 24 months in total
• Or the arrangement is "for a limited purpose" even if it could last more than 24 months

The 40% rule: if it becomes clear during the period that you will spend 40% or more of your working time at that location for more than 24 months, it ceases to be temporary from the point that becomes clear.

Practical Examples

Project-based work: A consultant contracted to work at a client's office for 18 months. The client site is a temporary workplace. Travel from home to the client site is deductible.

Secondment: An employee seconded from head office to a regional office for 15 months. The regional office is a temporary workplace. The ordinary commute to head office is not deductible; the travel to the regional office is.

Site-based construction worker: A worker assigned to a specific building site. Each site is generally a temporary workplace. Travel from home to each site qualifies.

Office employee with fixed base: An employee who works every day (or on hybrid arrangements) at the same office. The office is their permanent workplace regardless of how many days per week they attend. Travel from home to that office is never deductible.

When the 24 Months Is Reached

Once a workplace ceases to be temporary (because it becomes clear the employee will attend for more than 24 months), any travel from that point on becomes ordinary commuting. The employee should stop claiming the expense at that point.

Importantly, if an employee is initially told they will attend a site for 18 months but this is then extended to 30 months, the temporary workplace status ends from the date it becomes clear the 24-month threshold will be exceeded -- not retrospectively from the start.

Hybrid Working and the Office Commute

The growth of hybrid working has generated significant confusion about travel claims. The position is clear but often misunderstood:

Hybrid working does not change the ordinary commuting rule.

If your permanent place of work is an office in London and you attend that office on Tuesdays, Wednesdays and Thursdays while working from home on Mondays and Fridays, your travel to the London office on office days is still ordinary commuting. The fact that you work from home some days does not make the office a temporary workplace.

This was confirmed by HMRC's Employment Income Manual and has not changed as hybrid working has become more common.

The Home-as-Workplace Question

A related question is whether working from home means your home is your workplace. For some employees it is -- but only if the duties of the employment genuinely require the work to be done at home. If working from home is a personal preference or a convenience, your home is not a qualifying workplace for tax purposes.

If your home is a genuine workplace -- for example, a sales representative who has no fixed office and is expected to work from home as their base -- then travel from home to visit clients can qualify as business travel rather than commuting.

Business Travel: What Does Qualify

Separate from commuting, business travel -- travel in the performance of your employment duties -- is tax-deductible. This includes:

• Travel from your permanent workplace to a client site, supplier, or meeting
• Travel between multiple permanent workplaces (if you genuinely work at more than one)
• Travel from home to a temporary workplace (applying the 24-month rule)
• Travel to a one-off meeting at an unusual location

Where your employer reimburses business travel at or below HMRC's approved mileage rates, no taxable benefit arises:

• Cars: 45p per mile for the first 10,000 miles, then 25p per mile
• Motorcycles: 24p per mile
• Bicycles: 20p per mile

Where your employer does not reimburse business travel, you can claim the deduction through PAYE by submitting a form P87 (for claims under GBP2,500) or through a self assessment return.

Working From Home: The GBP6 Per Week Allowance

If you are required to work from home -- not simply choosing to -- you can claim a flat rate of GBP6 per week (GBP312 per year) towards the additional costs of working at home (heating, electricity, broadband proportional use).

This allowance can be claimed:

• As a HMRC-approved flat rate without receipts (GBP6/week)
• As actual costs with receipts if higher (requires calculation)

You can claim via form P87 online or on a self assessment return. The relief is worth GBP62.40 per year to a basic rate taxpayer and GBP124.80 per year to a higher rate taxpayer.

HMRC tightened the rules after the COVID period. From 2022/23 onward, the claim requires genuine necessity -- a contractual or operational requirement to work from home, not merely a preference or informal arrangement. If HMRC enquires, you should be able to point to evidence such as:

• Your employment contract specifying home working
• An absence of a desk or workspace at the employer's premises
• Your employer confirming in writing that home working is required

The Cycle to Work Scheme

The Cycle to Work scheme under section 244 ITEPA 2003 provides one of the most accessible commuting-related tax benefits. The scheme allows employees to obtain a bike and safety equipment through salary sacrifice, saving between 32% and 55% depending on tax and NI position.

How it works:

1. Your employer buys or leases a qualifying bike and accessories
2. You pay for it through a salary sacrifice arrangement over 12 months (typically)
3. The reduction in salary reduces your income tax and NI liabilities
4. At the end of the agreement, you typically have an option to purchase the bike for a nominal fair market value

Example: Bike costs GBP1,000. You sacrifice GBP83.33 per month (GBP1,000 over 12 months). As a basic rate taxpayer paying 20% income tax and 8% NI, your actual take-home cost is approximately:

GBP1,000 x (1 - 0.20 - 0.08) = GBP720 (saving GBP280)

As a higher rate taxpayer: GBP1,000 x (1 - 0.40 - 0.02) = GBP580 (saving GBP420)

There is no upper limit on the value of cycle scheme purchases following changes in 2022, though individual scheme providers may set their own limits.

The bike must be used primarily for qualifying journeys to work (at least 50% work-related use). This is not actively policed but is a condition of the scheme.

Electric Car Salary Sacrifice

For commuters who drive, electric vehicle salary sacrifice schemes have become popular. The benefit in kind on a zero-emission electric car is just 2% of the list price in 2026/27, making salary sacrifice for an EV dramatically more tax-efficient than taking the cash salary equivalent.

A basic rate taxpayer with a GBP40,000 EV list price faces:

• Benefit in kind value: GBP800 (2%)
• Income tax on benefit: GBP160
• Employee NI on benefit: GBP64
• Total personal tax cost: GBP224 per year

Combined with the employer's NI saving on the sacrificed salary, EV salary sacrifice schemes can reduce the effective cost of a premium electric car to well below the cost of equivalent public transport for some commuters.

However, the commuting journeys themselves remain non-deductible. The saving comes from the scheme structure, not from treating commuting as business travel.

If You Use Your Own Car for Business Travel

Where you use your personal car for genuine business travel (not commuting), and your employer does not reimburse you (or reimburses below HMRC's approved rates), you can claim the difference:

• 45p per mile for the first 10,000 business miles in the tax year
• 25p per mile thereafter

If your employer pays less than 45p per mile (say 30p per mile), you can claim relief on the difference (15p per mile) through self assessment or form P87.

Summary: What You Can and Cannot Claim

The complexity of travel tax rules catches many employees out, particularly in project-based roles and hybrid arrangements. If in doubt about whether a particular journey qualifies, HMRC's Employment Income Manual (available on GOV.UK) is the definitive guide, and a qualified tax adviser can confirm your specific position.