Finance Act 1998

61Travelling expenses

(1)For subsections (1) to (1B) of section 198 of the Taxes Act 1988 (relief for necessary expenses) substitute—

“(1)If the holder of an office or employment is obliged to incur and defray out of the emoluments of the office or employment—

(a)qualifying travelling expenses, or

(b)any amount (other than qualifying travelling expenses) expended wholly, exclusively and necessarily in the performance of the duties of the office or employment,

there may be deducted from the emoluments to be assessed the amount so incurred and defrayed.

(1A)“Qualifying travelling expenses” means—

(a)amounts necessarily expended on travelling in the performance of the duties of the office or employment, or

(b)other expenses of travelling which—

(i)are attributable to the necessary attendance at any place of the holder of the office or employment in the performance of the duties of the office or employment, and

(ii)are not expenses of ordinary commuting or private travel.

What is ordinary commuting or private travel for this purpose is defined in Schedule 12A.

(1B)Expenses of travel by the holder of an office or employment between two places at which he performs duties of different offices or employments under or with companies in the same group are treated as necessarily expended in the performance of the duties which he is to perform at his destination.

For this purpose companies are taken to be members of the same group if, and only if, one is a 51 per cent. subsidiary of the other or both are 51 per cent. subsidiaries of a third company.”.

(2)In the Taxes Act 1988 insert as Schedule 12A the Schedule set out in Schedule 10 to this Act.

(3)This section has effect for the year 1998-99 and subsequent years of assessment.