Hi, all
Been researching this for an hour and think I have the answer but not found anything specific enough to fully confirm, so asking on here for the collective wisdom of CUK.
I operate inside IR35 (no need to try and challenge this, please! I know it's not the norm, and I'm not wanting to open this up for debate. It was a decision I made a while ago, fully understanding the consequences, because of the kind of roles I am doing.)
I accept therefore that the new changes to T&S will affect me. I have been working for the same client since May 2015, so just under a year. I'm about to sign a new contract with them to take me to end of June 2016, so I will have been working for them just over a year by the time that is done.
The client is based in London, but there is another company office in Dublin. In my first contract I had to travel to Dublin a few times. In my second contract (nearly complete) I've needed to travel to Dublin more often and this will continue for my next contract. It's now roughly every other week, but it actually works out slightly less than that. When I travel there, I go either for 2 days or 3 days. So at maximum, it's 3 days every other week, or 30% of my time (but I think if I added it up it'd end up closer to 20% of my time, there are always various reasons why I end up there less plus sometimes as I say it's 2 days). The rest of my time I am either in London office or working from home.
Up until now I have claimed all T&S expenses - whether to London or Dublin - as tax deductible. Bearing in mind I operate inside IR35, that's quite significant as allowable T&S expenses are one of the few deductions allowable against tax in the IR35 deemed employment calculation. I live a long way from London so as I say, even the London T&S costs are relatively significant.
I accept that with the change in regulation, going forward there will be a change in what it is allowable for me to claim for allowable T&S. The question is, what is the specific change?
I think that going forward, if I am treated as an 'employee' of my client for T&S purposes, then my London T&S expenses are no longer claim-able, because this is classed as 'ordinary commuting'. But I think that my Dublin expenses will remain claim-able (just as they would be for any of my London-based permanent employee colleagues who do similar) because that is not 'ordinary commuting'.
As an aside, the difference between London and Dublin is recognised in my contract with the client because I can invoice them for T&S to Dublin, which I think underlines the point.
I found the draft guidance issued earlier:
https://www.gov.uk/government/upload...t-guidance.pdf
... and I think I'm in the same situation as the example individual Jim (except that he is brolly and I have MyCo):
The difference, however, is the proportion of time. I expect to be in Dublin a little more often than Jim is in Brighton during his contract. However it's still not a daily thing, and still a relatively small proportion of the contract - if we go back to the 24 month rule it's definitely no more than 40% for example.
So I think I can continue to claim my travelling expenses for Dublin trips even after April, but not London.
Thoughts gratefully received - and in particular, has that draft guidance been made final?? I couldn't find a link to a final version!
Been researching this for an hour and think I have the answer but not found anything specific enough to fully confirm, so asking on here for the collective wisdom of CUK.
I operate inside IR35 (no need to try and challenge this, please! I know it's not the norm, and I'm not wanting to open this up for debate. It was a decision I made a while ago, fully understanding the consequences, because of the kind of roles I am doing.)
I accept therefore that the new changes to T&S will affect me. I have been working for the same client since May 2015, so just under a year. I'm about to sign a new contract with them to take me to end of June 2016, so I will have been working for them just over a year by the time that is done.
The client is based in London, but there is another company office in Dublin. In my first contract I had to travel to Dublin a few times. In my second contract (nearly complete) I've needed to travel to Dublin more often and this will continue for my next contract. It's now roughly every other week, but it actually works out slightly less than that. When I travel there, I go either for 2 days or 3 days. So at maximum, it's 3 days every other week, or 30% of my time (but I think if I added it up it'd end up closer to 20% of my time, there are always various reasons why I end up there less plus sometimes as I say it's 2 days). The rest of my time I am either in London office or working from home.
Up until now I have claimed all T&S expenses - whether to London or Dublin - as tax deductible. Bearing in mind I operate inside IR35, that's quite significant as allowable T&S expenses are one of the few deductions allowable against tax in the IR35 deemed employment calculation. I live a long way from London so as I say, even the London T&S costs are relatively significant.
I accept that with the change in regulation, going forward there will be a change in what it is allowable for me to claim for allowable T&S. The question is, what is the specific change?
I think that going forward, if I am treated as an 'employee' of my client for T&S purposes, then my London T&S expenses are no longer claim-able, because this is classed as 'ordinary commuting'. But I think that my Dublin expenses will remain claim-able (just as they would be for any of my London-based permanent employee colleagues who do similar) because that is not 'ordinary commuting'.
As an aside, the difference between London and Dublin is recognised in my contract with the client because I can invoice them for T&S to Dublin, which I think underlines the point.
I found the draft guidance issued earlier:
https://www.gov.uk/government/upload...t-guidance.pdf
... and I think I'm in the same situation as the example individual Jim (except that he is brolly and I have MyCo):
Example 2 [I originally copied and pasted the wrong example! now corrected]
As in example 1 Jim is employed under an overarching contract of employment with X Ltd meeting the tests of supervision, direction or control outlined in EIM80100. During the three months Jim os working in Crawley in X Ltd’s warehouse he is asked to spend three days working at X Ltd’s other warehouse in Shoreham.
He is not entitled to relief for travel and subsistence in respect of travel to and from Crawley, but is entitled to a deduction under section 338 ITEPA for the travel and subsistence costs to go to Shoreham as this is travel to a temporary workplace and is not a new engagement.
As in example 1 Jim is employed under an overarching contract of employment with X Ltd meeting the tests of supervision, direction or control outlined in EIM80100. During the three months Jim os working in Crawley in X Ltd’s warehouse he is asked to spend three days working at X Ltd’s other warehouse in Shoreham.
He is not entitled to relief for travel and subsistence in respect of travel to and from Crawley, but is entitled to a deduction under section 338 ITEPA for the travel and subsistence costs to go to Shoreham as this is travel to a temporary workplace and is not a new engagement.
The difference, however, is the proportion of time. I expect to be in Dublin a little more often than Jim is in Brighton during his contract. However it's still not a daily thing, and still a relatively small proportion of the contract - if we go back to the 24 month rule it's definitely no more than 40% for example.
So I think I can continue to claim my travelling expenses for Dublin trips even after April, but not London.
Thoughts gratefully received - and in particular, has that draft guidance been made final?? I couldn't find a link to a final version!
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