Income Tax (Earnings and Pensions) Act 2003 section 340A

Travel between linked employments

Section 340A allows employees who hold directorships in linked companies to claim a tax deduction for travel expenses when travelling between the workplaces of those connected employments.

• An employee may deduct travel expenses when travelling within the UK between two linked employments, provided they are obliged to incur and pay those expenses and the travel is for the purpose of performing duties at the destination.
• The employee must have performed duties of one employment at the place of departure and be travelling to perform duties of another employment at the destination.
• At least one of the employments must be as a director of a company ("company X"), with the other employment being with a different company ("company Y"), and the directorship must have arisen because company Y, or a company in the same group as company Y, holds a shareholding or other financial interest in company X.
• A "group" for these purposes means a company and its 51% subsidiaries, and "director" has the same meaning as in the benefits code under section 67. The relief is also subject to the mileage allowance disallowance rules in section 359.