Employees who work from home are entitled to a tax deduction for the expense of travel to a temporary workplace this includes the cost of any necessary meals & drinks (subsistence costs).

They are costs incurred in travelling that are additional to any costs that you'd incur if it were not for the business travel. Travel to a temporary workplace is an additional cost.

If however your intention is to work on a single contract and then leave your Umbrella Company you would have to pay back the tax you previously saved from your expenses.

This is because your assignment becomes your permanent workplace and travel between home and office is treated as normal commuting - not an allowable business expense.

You are a freelance contractor and you work through a PAYE Umbrella Company. So you are actually an employee of the Umbrella Company and they are your employers.

You have employment rights through your employer, some of your rights are ‘statutory' rights (e.g. sick pay, maternity pay, paternity pay, and national minimum wage) other rights are granted through your contract of employment (e.g. notice period, place of work, and terms & conditions of assignment).

From a contractual position you will find that

• Your end client will enter into a contract for services with your agency
• Your agency will enter into a contract for services with your Umbrella Company (your employer)
• You will enter into a contract of employment with your Umbrella Company.
• Your Umbrella Company will provide you with assignment details for each contract you undertake.

Keep receipts. It is important to keep a record that supports your travel claim. This may be done by

• keeping copies of receipts
• maintaining a diary of your travel movements
• keeping copies of your timesheets/invoices.

You are a professional contractor and you intend to seek a succession of assignments through your Umbrella Company. Your Umbrella Company's contract of employment is an ‘over-arching' contract and enables you to establish your permanent work place at your home. You will use your home office to

• Find new contracts
• Undertake skills training
• Use as a base to travel to your temporary assignments
• Complete the paperwork for your current assignment.

Your assignments therefore take place at temporary workplaces. Why is this important? Because:

1. You can claim an allowance for use of your ‘home as office' - which is free of tax

2. You can claim an allowance for business travel to a temporary workplace.

Business expenses must be incurred in the performance of your employment. They are not intended to provide any profit to the employee.

As your employer, the Umbrella company is obliged to check and authorise claims and where possible verify claims with supporting evidence (e.g. a receipt).

Employers are allowed to re-imburse some expenses incurred by employees who are carrying out their employment duties at scale rates.

• A scale rate is calculated and pitched at a fairly modest level (say, £10 per day) which, taking one day with another, is intended to cover the average expense incurred.
• It is not pitched at a level intended to cover the highest amount that might be spent
• It is not pitched at a level intended to provide an overall profit element.