Travel and London Office Allowance

Permanent employees who have completed their probation period and are required to attend the London office, are eligible for the Travel and London office allowance benefit.

For employees who are based in the London office, their nominal annual travel cost (travel element) will be calculated on their direct journey to the London office for 2 days a week (full time employees) for 50 weeks a year, if this element is under £2,500 per annum, they may also receive a monthly allowance.

Employees who work four or five days a week in the office will be eligible for an annual travel ticket, subject to the criteria below.

There are two elements to the travel and London office allowance, which combined, has a minimum value of £2,500pa.

This means that full-time employees, if they attend the London office two days a week, can receive a minimum benefit of £2,500 per annum.

Please note that all travel reimbursements require a valid receipt. Please refer to the Finance page on the Intranet if you are unsure what qualifies as a valid receipt.

• For the purposes of calculating the cost of travel when visiting the London office, the journey is the most direct route from the employee’s nearest home train/ tube to the nearest train/ tube within reasonable walking distance of 20 Fenchurch Street.

 

• There is now no maximum distance limitation

• The nominal annual travel element is based on the cost of visiting the office for two days a week, for 50 weeks a year, 100 days in total (full time employees).

• Employees will be reimbursed for the cost of travel when visiting the London office, up to maximum of £4,200 per annum.

• The Tax and NIC liability for this element is subject to HMRC rules, please see below.

• For employees who have purchased their own season ticket e.g. a weekly or monthly ticket, which they use on the days they travel to the London office, we will apportion an element to calculate the daily rate, as follows:

- The cost of the ticket will be divided by the number of days the ticket covers, for example the cost of a weekly ticket will be divided by seven days to give a daily rate.

- For example, if a zone 1-4 weekly travelcard costs £50.50, divided by seven days gives a daily cost of £7.21. This amount will be reimbursed gross and the Tax and NIC liability for this amount is subject to HMRC rules, please see below.

• Employees who have purchased a ‘Flexi ticket’ can submit a claim when the ticket is purchased. The amount reimbursed is to cover the cost of the employee’s next eight journeys to the office, regardless of whether the ‘Flexi Ticket’ is used for the next eight journeys.

• If you have purchased a card which gives you discounted travel, you will be reimbursed for the actual price of the ticket you have purchased not the cost before the discount.

• If an employee regularly cycles to visit the London office, they can claim a mileage allowance of 20p a mile which is paid tax free if their place of work is designated as their home address (please contact HR@cisi.org).

• To calculate your allowance element, we will use your nominal travel cost based on the information you provide regarding your normal journey to the London office.

• The allowance element is the difference between the minimum Travel and London office allowance of £2,500 pa and the employee’s annual nominal travel cost (travel element).

• The allowance is paid as a monthly amount via the payroll and is subject to deductions for tax and NIC.

• Maternity – employees on maternity leave are entitled to their terms and conditions of employment, apart from salary, and will receive the allowance element, where applicable, of the Travel and London office allowance.

• The scheme applies to employees who are required to visit the London office.

• The two elements will be recalculated annually.

Those employees whose place of work is the London office, which they attend for 4 or 5 days a week, can apply for an annual travel ticket for their direct journey from home to work. The ticket does not cover additional items, eg a first class seat, car park tickets or an underground travel card if their direct journey is within reasonable walking distance of the office.

The maximum value of the travel ticket will be £4,200 pa, and the tax and NIC will be paid on the value of the ticket via the payroll. If the cost of the annual travel ticket is under £2,500 pa, the balance will be paid as a monthly allowance and subject to deductions for tax and NIC.

The cost of the annual travel ticket can be claimed via the expenses system, and please tick ‘HR approval’ in Webexpenses. Please contact HR@cisi.org for further information.

For employees who use different methods of travel, a non-standard journey, eg walk, bus, tube or who do not pay for their annual travel ticket, there is the option to receive the allowance of £2,500 per annum, rather than claiming for different journeys. The allowance will be paid monthly via the payroll and subject to deductions for tax and NIC.

Please note, as the calculation of the Travel and London Office allowance is personal to you. If there are any subsequent changes, eg you move or change your journey you will need to inform HR immediately so we can ensure you receive the correct allowance element.

If you do not inform us and receive a higher amount than you are entitled to, this may lead to disciplinary action.

Reimbursement of the following can be made via the expenses system:

• Travel tickets:

- By submitting a valid receipt (see: https://www.cisi.org/cisiweb2/intranet- new/departments/finance)

- Claims for a proportion of a ticket eg weekly, monthly, annual which the employee is using to travel into the office. The daily rate is calculated by dividing the cost by the number of days eg a weekly ticket cost divided by 7 days to give a daily rate.

• Claims for a ‘Flexi ticket’ can be submitted with the receipt when the ticket is purchased. The amount reimbursed is to cover the cost of the employee’s next eight journeys to the office, regardless of whether the ‘Flexi Ticket’ is used for the next eight journeys.

• Cycling claims – the mileage allowance for cycling to visit the London office

• Claims for travel should be made each month and authorised by your manager, and the Finance department will reimburse the amount into your bank account.

• Employees may have a future tax and NIC liability on the amount reimbursement for travel to the London office, subject to the HMRC rules, please see below.

The current HMRC rules on reimbursing travel expenses are as follows:

HMRC rules say - If the employee comes in for meetings, training, activities they can only do in the office, ad hoc reasons, that are not normal contractual / substantive duties - for less than 40% of their contractual days and the London office is their temporary place of work then travel can be reimbursed tax free.

If employees wish to change their contractual place of work to their designated home address, please complete this form. 

• At the end of the year (01 March to 28 February) the average percentage of contractual days the employee has visited the London office will be calculated and their tax and NIC liability will be calculated.

• If there is a tax liability, the Employee will pay tax and NIC on the total amount that has been reimbursed during the year. The total value of amount reimbursed in the year will be added to the March payroll and the employee will pay tax and NIC on the total amount that has been reimbursed during the year.

¹ It is an employee’s personal responsibility to monitor the number of days they attend the London office. The 40% attendance rule is effectively an “all or nothing” consideration. If an employee breaches it for instance by 1 day, travel costs for the entire tax year become liable to tax and NICs at the end of the year.

² An annual travel ticket must be purchased upfront in order for the tax and NI to be deducted from the amount reimbursed monthly via payroll.

When an employee leaves the Institute, if they have visited the London office for more than an average of 40% of their contractual days since the start of the tax year, tax and NIC is due on the value of the travel which has been reimbursed. This amount will be included in their final salary calculation.

 

A – It is 40% of your contracted working time/hours. For example, if you work 5 days a week 40% is 2 days a week/ average of 104 days in the 12-month period (1 March to 28 February), if you work 3 days – 40% is 1.2 days a week/ average of 62 days in the 12 month period

A - Yes as technically a bank holiday is a working day, and we are paid for the day.

A – it is 40% of the number of days you have worked from the start of the period to your last day of employment.

Q- How will the 40% average number of days be calculated as I joined CISI during the period?
A – it is 40% of the number of days you have worked since being eligible for the allowance to the end of the period.

A – Where the pass allows the employee to travel to the office free of charge, they will receive the allowance element, which will be subject to tax and NIC. This should be claimed via HR.

A – yes, provided the cost of the discounted travel is less than £2,500pa, when calculated on visiting the London office for 2 days a week for 50 weeks a year.

A – This is calculated on the basis of 2 days a week for 50 weeks a year. It is not calculated on the actual number of days because we do not wish for there to be any incentive or disincentive to come to the office.

A - We would calculate your nominal annual travel cost based of 2 days a week for 50 weeks a year, and if this is under £2,500 pa, you will receive the balance as an allowance. You will be able to claim for your travel tickets, and at the end of the year the total value of amount reimbursed in the year will be added to the March payroll, so you pay the tax and NIC due.

A – The tax liability depends on the percentage of days you have visit the office. If this is more than 40% of your working days, you will pay the tax and NIC on the total value of the tickets which have been reimbursed, irrespective of your place of work. This amount will be included in the March payroll each year.

You may wish to monitor the number of days you attend the London office. The 40% attendance rule is effectively an “all or nothing” consideration. If an employee breaches it for instance by 1 day, travel costs for the entire tax year become liable to tax and NIC.