What does section 246 of the Income Tax (Earnings and Pensions) Act 2003 provide?

Section 246 provides a complete income tax exemption where an employer helps a disabled employee with the cost of ordinary commuting between home and work. The help can be direct provision of transport or payment and reimbursement of the employee's own travel expenses. No income tax charge arises on the benefit received.

Who qualifies as a disabled employee under section 246?

A disabled employee is defined as someone who has a physical or mental impairment that has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities. This mirrors the approach used in disability discrimination legislation and covers employees with significant, ongoing conditions rather than minor or temporary ailments.

Does the section 246 exemption apply when an employer provides a car to a disabled employee?

No, the section 246 exemption does not apply where a car is made available to a disabled employee. That scenario is dealt with separately under section 247 of the Income Tax (Earnings and Pensions) Act 2003, which contains its own specific provisions for the tax treatment of a car provided to a disabled employee for commuting.

Does section 246 cover travel to training courses for disabled employees?

Travel to a temporary location such as an external training venue is already exempt from tax for all employees, so section 246 is not needed. However, where training takes place at the employee's normal workplace, the journey counts as ordinary commuting, and section 246 provides the exemption for disabled employees making that journey.

Income Tax (Earnings and Pensions) Act 2003 section 246

Transport between work and home for disabled employees: general

Section 246 provides a tax exemption for disabled employees who receive help from their employer with the cost of commuting between home and work.

No income tax arises when an employer provides transport or reimburses transport expenses for a disabled employee's ordinary commuting journey
The exemption covers both direct provision of transport and payment or reimbursement of the employee's travel expenses
The exemption does not apply where a car is made available to the disabled employee — that situation is dealt with separately under section 247
A disabled employee is one who has a physical or mental impairment with a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities

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