Guidance for consideration when defining a work base for home and agile/hybrid working

Section 35.5 uses the following definitions when referring to home and agile/hybrid workers: 

Contractual homeworker: an individual who performs the majority of duties from their home. They may travel to a work base or attend events on an ad-hoc basis. Their home is designated as their contractual work base.

Agile/hybrid worker: an individual who performs their duties across more than one work base which may include their home address. They may be required to attend events or travel to other work bases or locations on a more regular or ad hoc basis. Their designated contractual work base will be at one of the employer’s sites.

HMRC/the government’s definition of a homeworker is much more narrow when used for the purpose of determining eligibility for tax relief provisions. For home to be a workplace and to be able to claim the tax relief for expenses, the employee must be able to demonstrate that homeworking is an objective requirement of the job, rather than personal choice.

Employers can use a wider definition, including for the purposes of allowances and reimbursement of costs. However, it should be made clear whether or not any payments will be treated as taxable earnings.

Contracts of employment must contain details of an employee’s place of work, as required by section 1 of the Employment Rights Act 1996, and the need for amendment to this term will depend on the arrangements being agreed, including whether homeworking is part of an ad hoc arrangement or is to be a permanent change. Therefore, employers which include home and agile/hybrid working as a feature of work patterns for staff will need to think about whether an employee’s designated work base needs to change.

When deciding whether to amend a work base, it is helpful to consider the following factors:

• Is the requirement initiated by the employer (e.g. reducing the estate, specific requirements of the role), is it a personal choice (e.g. a flexible working request) or is it a reasonable adjustment request? 
• How often will the employee be required to attend site and, if it is likely to be regular, would contractual home working or agile/hybrid working be more appropriate as per the definitions above. If they attend an employer work base, do they have space in which to work?
• Changing the designated contractual work base may have implications for travel costs, high cost area supplements (HCAS), unsocial hours payments, subsistence and tax arrangements.

Employers need to ensure that local policies are clear, the implications have been considered, and that any additional costs or tax relief have been set out to the employee before reaching agreement.

• Different circumstances could lead someone to consider home working, including as part of a flexible working request initiated by an employee, or as a reasonable adjustment, or as a new or changed employment model initiated by the employer.
• There are differences between being a contractual homeworker and an agile/hybrid worker as per the Section 35 definitions outlined above. These should be considered before requesting a change.
• Your contractual work base has an impact on terms and conditions of service and how HMRC determine eligibility for tax relief provisions. HMRC's definition of a homeworker is very narrow but employers can use a wider definition – so refer to local policies. 
• Changing your designated contractual work base may have implications for travel costs, high cost area supplements (HCAS), unsocial hours payments, subsistence and tax arrangements.  If employees are requesting a change of work base the impact should be clearly set out and considered fully prior to a final agreement.
• Where a change of work base is part of an employer led change management process, you should be consulted along with your recognised trade union.
• Employees should have access to advice and support via their trade union representatives and HR departments.
• If your work base is going to change, you should be provided with adequate and clear information on how this will affect your terms and conditions.

These questions and considerations should help to establish whether an employee would be defined as agile/hybrid or contractual homeworker in line with the Section 35 definitions.

It is important to consider the impact that changing or agreeing work base will have on both employers and individuals to enable you to find a mutually agreeable outcome. 

Please note: as outlined above an employee can have a contractual work base as home, but this does not necessarily make them eligible for tax relief. 

This is covered in NHS TCS Handbook Section 35.33, which states: 

"Section 17.15 of the terms and conditions sets out that mileage will be reimbursed for miles “in excess of the home to agreed work base return journey”. For employees who are designated as ‘contractual homeworkers’ this means any required business mileage from home to another location will be reimbursed as the home and the work base are one and the same (so table 8 does not apply). 

"For agile/hybrid workers section 17.15 means reimbursement for miles in excess of home to their designated contractual work base."

Therefore, it is important to ensure that contractual homeworkers are informed and understand whether or not reimbursement payments qualify for tax relief under HMRC provisions.