24 month rule in London

[VillageContractor]

Hi,

For those of you working in London what do you do for multiple roles in London? Do you distinguish between central,west, north etc. or stop claiming after 24 months?

PS - I understand the rules but curious how other people see it, especially those who live in London

Thanks

VC

[blacjac]

It depends

[kaiser78]

London is a slightly different example to most. You could be working in say Canary Wharf and taking train X to get in, or working in the West End or City and taking train Y to get in. Both different journeys, different lines, different calling points and destinations.

And so the 24 month rule would re-set each time this location changed. That's how it has been explained to me before anyway.

[TheCyclingProgrammer]

Depends on where you're travelling from and whether there's any significant difference to the journey either in terms of time or cost.

Personally I think its all relative. If you live 50 miles outside of London then its arguable that your journey is not going to be significantly different either in terms of cost or time, whether you're working in the City or Kensington.

If you live somewhere in East London then your journey is likely to be significantly different (say a 15 minute tube journey from Stratford to Mile End vs getting the train to Liverpool Street then several different tubes to get to the other side of London).

Not all cases will be clear cut and might depend on your mode of transport. For instance, I don't generally have to consider the 24 month rule as I'm never on-site more than 40% of the time but if I did, then to use some recent examples...most of my clients tend to be around Shoreditch/Old Street - I cycle to the station, get the train directly into Liverpool Street then cycle 5 minutes up the road. Journey takes about 70 minutes and costs me a return train ticket and I cycle about 6 miles in total. A recent client is based near Olympia in Kensington which is again a train direct to Liverpool Street but its then a 45 minute cycle to Kensington. Cost is still the train ticket but my cycling mileage is probably 3 times as much. Is that significant? Its a judgement call.

[handyandy]

Interesting thing is the difference between HMRC guidance and practice. I have worked in London all my career and mainly lived some way out of town. Whilst I've been a perm and contractor over the years I've always claimed my costs of travel to/from home and client office when I've been contracting (I never had more than two years at the same client address).

Whilst I was never investigated I always used fairly reputable accountants and always operated as a LTD and outside IR35 when I was doing this. Accountants always advised to keep claiming despite the majority of the journey not changing (train into liverpool street then tube/dlr/walk would mean 95% of journey was always the same). I usually claimed for car from home to station, parking, train fair (first class) and tube/dlr. Accountants always said this was acceptable.

Now I'm not saying that HMRC would let this go if they decided to investigate but it was seen as standard practice (at least it was 6 years ago). The main problem is it's always hard to tell because HMRC keep trying to roll back the boundaries which they have previously accepted.

In general a reputable and experienced accountant should be able to advise where the line is. Accountants are not tax advisers but they do see where HMRC are challenging so their advice is valuable but if it proves wrong it is you that will end up repaying tax.

PS cycling programmer - do you claim a mileage allowance for your cycling (I heard that this was allowable but never spoke to anyone who claimed it)?

[northernladuk]

London is a slightly different example to most. You could be working in say Canary Wharf and taking train X to get in, or working in the West End or City and taking train Y to get in. Both different journeys, different lines, different calling points and destinations.

And so the 24 month rule would re-set each time this location changed. That's how it has been explained to me before anyway.

Might want to look in to that in a little more detail. It's not that simplistic. For some cases that would be the case but I think that statement is to basic to be of use as it is. If you take the 24 month rule as applying to a geographic area it's a problem so you have to start looking in to significant cost or change to journeys. Different tube stops won't meet this either so could be in trouble there. Significant is they key word here and perception kicks in. When my gigs can be 100s of miles in between a trip between London zones does not count as significant to me.

[TheCyclingProgrammer]

cycling programmer - do you claim a mileage allowance for your cycling (I heard that this was allowable but never spoke to anyone who claimed it)?

Yes I do. When I lived in East London, I often cycled home from Old Street/Hoxton, about 12 miles. It all adds up, it's not a fortune but it goes towards maintaining the bike (I have a folder).

[mudskipper]

To be clear, you can't claim the mileage allowance if it is a 'company bike'. So depending on how much you spend on the bike, and how many miles you do, it may be more advantageous tax wise to buy the bike through the company and not claim mileage.

[eek]

Might want to look in to that in a little more detail. It's not that simplistic. For some cases that would be the case but I think that statement is to basic to be of use as it is. If you take the 24 month rule as applying to a geographic area it's a problem so you have to start looking in to significant cost or change to journeys. Different tube stops won't meet this either so could be in trouble there. Significant is they key word here and perception kicks in. When my gigs can be 100s of miles in between a trip between London zones does not count as significant to me.

London travel is explicitly covered in HMRC guidelines and examples. A change of a couple of tube stops (even Zone 1 to Zone 2 or reverse) simply doesn't cut it...

[northernladuk]

London travel is explicitly covered in HMRC guidelines and examples. A change of a couple of tube stops (even Zone 1 to Zone 2 or reverse) simply doesn't cut it...

Indeed but everytime we link it it appears to cause more issues than it solves.