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Inside IR35 expenses vs reasonable adjustments for disability

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    Inside IR35 expenses vs reasonable adjustments for disability

    Hi all, I've got what I think is quite an unusual question. I've had a look on previous threads and can't find anything like it but apologies if I have missed anything.

    I will start a new contract on Monday (boom!) I am nervous and excited as I've not worked in 8 months because I had to award myself some sick leave. I live in Wiltshire, and my last contract (most of the last 2 years with a few short gaps) was for a client (in financial services) where I worked between London and Dublin. I would work 3 days in either London or Dublin and 2 days from home, each week.

    That last contract was inside IR35 and so will my next one be (this is relevant to my question or I wouldn't have mentioned it, I understand most of you won't be and it's unusual but it's not going to change so please don't challenge me on this!) What that meant is half way through my last contract (April last year when the new rules came in) I stopped being able to claim travel expenses for the London element from my limited company, so they were coming from my net salary (because I'm inside IR35, everything is paid to me as salary). Obviously this is expensive as my train to London is £900 a month! But c'est la vie, and if the rate didn't make it worth it, I wouldn't do it.

    Move on to this year. I had taken a couple of months off as a conscious choice. In the middle of that I unfortunately had a seizure. I had had epilepsy as a child but 'grown out of it' and been seizure-free (and unmedicated - i.e. totally well) for over 20 years. But the epilepsy is back. I immediately had to surrender my driving licence (all you drivers will be pleased to hear! :-) )

    This is why I extended my time off - I had to go through all the investigations, get onto meds and adjust to them (and they're pretty heavy duty). It's not been an easy year. Fortunately my war chest was adequate to support me in this so I have waited until feeling fit as a fiddle before returning to work.

    The key thing now is that I must get enough sleep. I have never felt I needed a lot of sleep before, and it was routine for me to get 5 hours or less (particularly when mid-project and travelling a lot) and still function well. But that has had to change. Sleep is critical for me to not get seizures. So now as I return to work in London, I will need to ensure that the commute (over 2 hours each way) plus job demands doesn't impinge on my sleep - a tall order. The simple decision is that I will stay over in London more often and therefore be incurring hotel bills. I will also, since I live in the middle of nowhere with very few buses, and none early or late, need to get taxis from home to the station. in other words, it's going to be an expensive business going into this contract.

    As above, if the rate wasn't worth it, I wouldn't do it (I'll be on 20% more than my last London contract and that was pretty good itself). And if I have to spend the money from my salary, I will do so (health important, etc). But it occurred to me that the only difference between my behaviour on this contract and the last one is my epilepsy i.e. my new disability. Last time I commuted back and forth to London on all days and didn't stay over, and I drove to and from the station. This time I will use hotels a couple of times a week and get taxis to the station, and the only reason is my epilepsy. Given this is necessary to my work, can my company pay expenses as a reasonable adjustment due to my epilepsy? I ask because I realised it genuinely is what is happening.

    I'm obviously going to ask my accountant this and I'll mail them shortly but I know he is away for a while so it'll be a few days before I get a response. And in any event I'm interested in a wider range of views. So all thoughts gratefully received please, CUK!

    Bottom line: if I have to lose a grand a month or more off my net salary I will do it, because it'll be worth it. But it does seem unfair if I can't get any kind of tax relief given the circumstances so it is worth an ask.

    P.S. Epilepsy is definitely counted as a disability for these purposes - I do have a disabled railcard and bus pass for example now and will even get a 1/3rd discount on my Oyster travel! I'm on the lucky end of the epilepsy spectrum and haven't had a seizure since the one in January so if I'm very lucky I'll get my licence back in less than 6 months. But only if I look after myself.... and my doc's given me a lecture about getting enough sleep when I go back to work...

    #2
    Hello, the restriction on travel and subsistence expenses is linked to your status under IR35 but conditional on your being subject the the supervision, direction and control of your client. If you are subject to SDC by your client then costs related to travel and subsistence would not be allowable and, sadly although this is wholly unfair there are no provisions specifically for your situation.

    However, it could be possible for you to claim tax free relocation allowance as these costs would have been incurred for the purpose of your employment. You should investigate this thoroughly with your accountant though as I haven't yet fully checked the details.

    Hope this is helpful.

    Comment


      #3
      Originally posted by Patrick@Intouch View Post
      However, it could be possible for you to claim tax free relocation allowance as these costs would have been incurred for the purpose of your employment. You should investigate this thoroughly with your accountant though as I haven't yet fully checked the details.

      Hope this is helpful.
      Not really......
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        Hi guy, thanks for your responses so far. After posting, I emailed my accountant and then did a bit of research. I totally understand the reason I can't claim expenses for travel to the client site usually. In effect they're saying, if you were an actual employee you wouldn't be able to claim expenses for travel to your usual place of work, so you can't when you're a contractor under SDC. Fine.

        However if I were an employee of the client here, they would have to make reasonable adjustments for me and in my situation those may well include the ones I have decided to make i.e. taxis and hotels (they may also get grant help from Access to Work to help fund the cost). My understanding is there may be relief available to the individual so that a Benefit in Kind does not arise. This is under the Income Tax (Benefits in Kind) (Exemption for Employment Costs Resulting from Disability) Regulations 2002, SI 2002/1596.).

        My point is, this isn't about the IR35 regs, this is about wider disability-related regs that would equally apply if I were an employee of the client (and do apply given I am an employee of my company).

        I wouldn't be entirely surprised if my situation is sufficiently unusual (how many disabled contractors doing this sort of job are there? Fewer even than the level of disabled people in the workplace overall, I'd bet) that it falls between a load of regs and therefore I can't actually claim anything. But equally I think it's possible I am indeed covered.

        I am actually starting to wonder if my limited company should apply to Access to Work for grant support with this...

        Hmmmn...

        Comment


          #5
          I do t think Access To Work grants are there to ease your tax burden while carrying out your business in the way you chose to be fair.
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #6
            Presumably a contract review or something else is convincing you that you are inside IR35 ? Do tell ...

            Comment


              #7
              Originally posted by radish2008 View Post
              Presumably a contract review or something else is convincing you that you are inside IR35 ? Do tell ...
              Hmm. I assumed it was a PS gig so could be a good question.
              'CUK forum personality of 2011 - Winner - Yes really!!!!

              Comment


                #8
                Originally posted by Glencky View Post
                <snip>

                I'm obviously going to ask my accountant this and I'll mail them shortly but I know he is away for a while so it'll be a few days before I get a response. And in any event I'm interested in a wider range of views. So all thoughts gratefully received please, CUK!

                Bottom line: if I have to lose a grand a month or more off my net salary I will do it, because it'll be worth it. But it does seem unfair if I can't get any kind of tax relief given the circumstances so it is worth an ask.

                P.S. Epilepsy is definitely counted as a disability for these purposes - I do have a disabled railcard and bus pass for example now and will even get a 1/3rd discount on my Oyster travel! I'm on the lucky end of the epilepsy spectrum and haven't had a seizure since the one in January so if I'm very lucky I'll get my licence back in less than 6 months. But only if I look after myself.... and my doc's given me a lecture about getting enough sleep when I go back to work...
                The first question is "Would a permanent employee of a company get their travel expenses paid as a reasonable adjustment?"

                I would suggest you talk to a disability charity such as Epilepsy Action but I would strongly doubt it as none of the employees I know who have a disability have this. In fact most have specifically moved so getting to/from work isn't a burden. A employer could easily argue that unless you had very niche skills making the adjustment e.g. paying for your travel wasn't a "reasonable" cost due to the great expense.

                Actually I just Googled this after writing it and found this - linky

                The next question is "Is there some kind of government assistance to help with your mobility including with extra costs to/from work?"

                I know there use to be and it was called the "Disability Living Allowance". Now you have to undergo an assessment for PIP (Personal Independence Payment) and as you are mobile on you own you will likely get very little or SFA. ( If you do put in an application make sure you get a charity to help you with it each time you get assessed before putting it in.) After that look at "Access to Work" grants as NLUK said.
                "You’re just a bad memory who doesn’t know when to go away" JR

                Comment


                  #9
                  Originally posted by Glencky View Post
                  However if I were an employee of the client here, they would have to make reasonable adjustments for me and in my situation those may well include the ones I have decided to make i.e. taxis and hotels (they may also get grant help from Access to Work to help fund the cost). My understanding is there may be relief available to the individual so that a Benefit in Kind does not arise. This is under the Income Tax (Benefits in Kind) (Exemption for Employment Costs Resulting from Disability) Regulations 2002, SI 2002/1596.).
                  But you aren't an employee of the company - you are an independent contractor who is being taxed as if you were an employee without having any employment rights to go with it.

                  You could always argue that the role is inside IR35, therefore you want to be treated as an employee for both taxation and employment rights. And if you were then found to be a worker or employee then you might be able to get some of the benefits to which you allude.

                  Alternatively, doing that might help persuade the client to treat you as outside IR35 in which case your problem goes away a bit (you still have to pay the expenses, obviously, but at least they become valid business expenses rather than personal post-tax ones).
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                  Comment


                    #10
                    Thanks again to those of you who've been helpful (except NLUK: seriously, when you're dealing with what I'm dealing with, when you have to live your life with the anxiety of potentially losing consciousness and injuring yourself severely at any time, when you have to think about the fact you have a 1 in 150 chance of 'waking up dead' at some point in the next 12 months due to SUDEP, when you have to take medication that has severe side effects and is potentially life-limiting, and when despite all of this somehow you've got yourself into a situation where you can actually work and have some chance at continuing your previous professional life - in short, when you actually have some understanding of what epilepsy is, come back and speak to me about it. In the meantime, move along, please. I'm fed up with idiots who have no idea of what it means demeaning the fact that it is real, and its impacts are real. 1 in 100 people have epilepsy and not all of them are as lucky as me, but the fact that I am relatively lucky doesn't mean I don't suffer with it, because I do. But perhaps only 'real' disabled people are entitled to support, in your world, and I don't qualify...)

                    SueEllen and The Faqqer - thanks for your comments/ ideas. There's no question of me attempting to apply for DLA, PIP, or any other benefit - I wouldn't qualify for it (something wrong if I did given some of the people who should but don't) and wouldn't even try to go down that route. I appreciate I'm not an employee of the client here, but I *am* an employee of my limited company. Put simply, the limited company has a few options here. One of them would be to have me work from home (for example) because I can't drive. That would be cheap from one perspective, but would severely limit my role options and therefore ultimately be commercially bad. It is definitely better for my limited company to sell my services in London for a higher rate, whilst stumping up for the travel costs to enable it, than to make other apparently cheaper adjustments. Yes, clearly I could move house and if I can't get my driving licence back in 5 months that is on the cards (but remember this is my home - I will move if i have to in order to get my life back but I don't want to do it unnecessarily). But seriously, in this situation if I weren't my own boss, would a company force you to move house or would they consider paying for taxis a reasonable adjustment to enable you to continue to bring in maximum income? I reckon the latter!

                    At the end of the day, as my original post made clear, if I have to fund it all myself from my salary then I will do so, it's the basis on which I'd been planning and assuming. It has only been late in the day when thinking about the difference between this year and last year and reflecting on my frustration at what that means for me, that it suddenly occurred to me there might be some HMRC rules covering this which might help me. That's the point about disability regulations. They're designed to put disabled people onto a more level playing people with able bodied people. And right now, the only thing different between what I can do this year and what I could do last year, is my epilepsy.

                    I suspect overall that I'll find I'm between regulations in my definitely-unusual situation. Wouldn't it be nice, though, if disabled people WERE enabled to pursue all kinds of careers, including limited company contractors?

                    P.S. not a public sector client, private sector but definitely within IR35.

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