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ECJ rules that workers without fixed office are entitled to count time spent travelling from home to First Meeting as Work
By Sarah Connellan, EY Tax Partner, EY Ireland
Sep 22, 2015

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European Court of Justice rules that workers who do not have a fixed office are entitled to count time spent travelling from home to their first meeting of the day as work.

The European Court of Justice (ECJ) ruling on Friday 11th September 2015 that workers who do not have a fixed office are entitled to count time spent travelling from home to their first meeting of the day as work.

“The ECJ recently released a judgement in a case involving technicians employed by a Spanish company whose jobs required them to call to client sites. The point at issue in the case was whether the journeys which the workers made from their home to the first call of the day, and from the client site to their home at the end of the day, should be regarded as part of their working time. The Court concluded that it should. While the ruling was given in the context of the EU Working Time Directive, it could nonetheless have significant tax implications for those employees who do not have a ‘normal place of work’. This includes categories such as sales representatives, service technicians and engineers whose job is essentially ‘on the road’ and for whom travel to client sites is a normal part of their daily work.”

“The Revenue Commissioners have for many years taken the view that while the cost of such travel is an allowable expense for tax purposes, the journey from home to the first appointment, as well as the journey home from the last, is ordinary commuting, and therefore the allowable mileage is limited to the shorter of the distance from the employee’s home to the work location, or the employer’s base (which Revenue regards as the normal place of work) and the work location.”

“The reasoning behind this lies in the tax legislation dealing with employee expenses, which requires that the cost must be incurred while ‘travelling in the performance of the duties’. While this may seem a straightforward requirement at first sight, historically, it has proved a difficult test to satisfy. This is largely due to UK case law dating back to the early part of the last century, which interpreted the legislation essentially as meaning that the work did not begin until the point when the individual arrived at the work site. Any travel up to that point was merely ‘preparatory’.  The ECJ ruling would seem to contradict this traditional viewpoint. The Court has very clearly ruled that in the circumstances of the case before it, the journeys made by the workers between their homes and the first and last customer of the day constituted working time, and that they were carrying out their duties over the whole duration of those journeys. If the ECJ’s interpretation were applied to the tax legislation mentioned above, it would seem difficult to deny that the travel was undertaken while ‘travelling in the performance of the duties’, and that in similar circumstance, the cost of travel should be considered an allowable expense.”

“The ruling comes at a particularly opportune time, as the Department of Finance is currently conducting a public consultation process around the tax treatment of travel and subsistence expenses generally. It is to be hoped that those conducting the process will have regard to the ECJ judgment.”

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