Press releases

HMRC targets abusive travel schemes

Autumn Statement

3 December 2014

Mark Groom, tax partner at Deloitte, comments on the Government’s proposal to remove tax relief on business expenses when claimed in conjunction with salary sacrifice schemes.

“When the new statutory exemption for business expenses is introduced in April 2016, expenses claimed in conjunction with a salary sacrifice scheme will be excluded from the exemption. This measure is aimed primarily at preventing the loss of National Insurance which is not paid on reimbursed travel expenses.

“Employees can claim tax relief for business travel expenses under Self-Assessment, so there is normally no tax lost from such arrangements. But employees cannot claim relief for NI under Self-Assessment.

“The measure will be a significant loss to those employers and employees, who have worked hard to comply with the legislation. Travel schemes are often used in construction, security, engineering and business services sectors, and by employment businesses and umbrella companies supplying temporary labour to their clients.

"Employers who do not operate travel schemes might argue that the Targeted Anti Avoidance Rule (TAAR) establishes a more level playing field by eliminating the NI advantage for those who operate such schemes. However, there are many arrangements which provide an NI advantage which are clearly not abusive – why single out Travel Schemes? Furthermore, employees might argue the opposite and that this is a step backwards since, without an employer sponsored travel scheme, in practice they are likely to be put back into the position they were in before the rules changed in 1998 – no relief at all.”

Visit our dedicated Autumn Statement website


Notes to editors

About Deloitte

In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.

Laura Parsons
Deloitte LLP
+44 (0) 20 7303 0885
+44 (0) 78 2695 2940

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