Last month we made the point in response to an HMRC consultation that the travelling expenses regime needs a thorough review. But it is not always realised that the expenses rules for housing benefit and council tax benefit are almost identical to those for tax purposes.
In a new decision from an eminent Social Security Commissioner an appeal from the local authority was rejected and the reimbursement of a care worker’s travelling expenses was held not to be income.
The work pattern
Mrs X, the care worker, had her 'place of work' described as being 'at any location within the London Borough of …'
She was required to attend a staff meeting every other week. It was usually held on a Monday afternoon. The contract made no provision for its location.
The employer's premises consisted only of an office for the manager and receptionists. A room was hired for meetings.
Mrs X’s work programme for the following week was delivered to her home by post and she travelled to her clients from home in her own car. Her hours allowed 15 minutes travel time to a client. She might then have to travel on to another location, but this was not always so. If she had to report a problem to the employer's office, she would use her mobile (if it was urgent) or her home phone (if it was not). Once her duties were over, she travelled home. She completed her claim for expenses at home and posted it to her employer. She was paid an expense allowance at a rate per mile for all the miles that she travelled in any day of work.
The local authority decided that the claimant's place of employment was the first place she went to work on any particular day. She therefore would not be deemed to be at work until the home of the first client had been reached. Travelling to the first client and returning from the last was argued to be “home to work” travel.
Ironically, HMRC in this particular case regarded Mrs X as “an itinerant worker” and therefore based at home.
The local authority argued that HMRC agreement could not be relied upon as the wording for housing benefit purposes was slightly different (although, in our view it is, for all intents and purposes, identical).
The Commissioner found that it was entirely possible for the care worker to be based at home for the purposes of her duties. He went further and decided that Mrs X had no place of employment at all and therefore the legal provision disallowing expenses between home and a place of employment was of no relevance.
A refreshing decision
This judgment is a refreshing confirmation that old legal language can be interpreted in a realistic and pragmatic way to provide fairness to those on a low income who cannot avoid incurring reasonable costs in doing their job.
It also strengthens the argument that such workers start their jobs when they leave home for the purposes of counting hours for the purposes of the working tax credit.
Finally it reinforces the consistent LITRG plea for the rationalisation of legal language and approach across the tax and benefits regime. It is time for all government departments with an interest in such matters (HMRC, DWP, BERR and the local authorities) to get together with the voluntary sector and tax/benefit professionals to provide workable and simple guidelines.
Contact: John Andrews (Tel: 0844 579 6700 Fax 0844 579 6701)