Travel expenses inside IR35

**northernladuk** · 16 February 2022, 15:14

Which umbrella are you going with and can you swap to Clarity Umbrella. They have a comment on exactly this on their pages.

https://clarityumbrella.co.uk/contra...pany-expenses/

Chargeable Expenses

The new legislation does not prohibit the ability to claim for chargeable expenses. These are expenses that your agency or client has agreed to reimburse to you. Chargeable expenses will be invoiced added to your invoice value by us direct to your agency / end client. You therefore receive the full value of the expense back provided that the expense is allowable for tax purposes. Please note if your agency / end client has agreed a fixed figure for expenses, then we will ask for receipts in order to ascertain the actual costs incurred on the assignment. If there is an excess paid that has not been expensed, then we will look to tax this figure when we process payment to you.

A few other umbrellas have similar statements on their page so I'd go back to the Umbrella and press them hard for an answer (or leave and go to Clarity). Use the term 'Chargeable expenses'. On the whole expenses can't be claimed. Commuting and client paid travel are totally different so be very clear on the terms so as to avoid people making assumptions.

**malvolio** · 16 February 2022, 15:18

I though we covered this already... ICBW...

However, it's travel to a normal place of work. If you're getting compensated in full, why not simply treat it as a personal disbursement rather than as a business expense, since it all ends up in your pocket untaxed anyway? Doing anything else means you fall foul of the "no expenses inside IR35" ruling and simply adds unnecessary complication.

And fix your font. The small version is very irritating.

**northernladuk** · 16 February 2022, 15:22

What's going on here though?

I am currently on a contract outside of IR35 – work mainly from home on the agreed rate and claiming separately for any travel related expenses at the cost when I need to go places.
While my work has been independently assessed (twice) to be outside IR35 my client wants to change for me to be inside IR35 and work through an umbrella company. I have been asked to provide an estimate how much my rate would have to change to be net income neutral to me.

The contract you are currently on has had an SDS supplied to say the client deem it outside? The independent assessment is irrelevant now. Did you get and SDS saying outside from the client. It's law so you've got an issue if you haven't.

As mentioned by Eek in another thread you've an issue that a change in determination or lack of an initial one means you could have been inside from either the beginning of the contract or since the legislation hit?

Is the move to inside because they've banned PSC or will the be giving you and SDS saying you are inside?

Going from outside to an inside at the same client not an issue for you? I think it should be.

Waiting for some more commentary from eek on the outside SDS to inside SDS as he mentioned from the beginning but I thought you could do part of the contract outside and the situation changes so the client deems the next one inside. Not sure of the outcome of this yet and would need more info from you about how it applies here. From what you've put I'd say you've got a big problem to deal with.

**northernladuk** · 16 February 2022, 15:26

Originally posted by malvolio View Post

I though we covered this already... ICBW...

However, it's travel to a normal place of work. If you're getting compensated in full, why not simply treat it as a personal disbursement rather than as a business expense, since it all ends up in your pocket untaxed anyway? Doing anything else means you fall foul of the "no expenses inside IR35" ruling and simply adds unnecessary complication.

And fix your font. The small version is very irritating.

I think this is the thread Mal is talking about so see if it matches your situation. The one below is a payment to cover commuting. I read in to the OP's it's project related work required by the client so chargeable.

https://forums.contractoruk.com/umbr...y-payslip.html

And yes, the small text is annoying. Odd how two people on the same day are doing it?

**eek** · 16 February 2022, 16:01

Given that the OP is virtually unreadable a couple of questions

1) where is your base office and how often will you visit there. Hint this can't be at home as it does need to be an actual office and is likely to be the one where you spend more time then elsewhere when in the UK.

2) Once you've got that bit sorted out expenses to travel elsewhere are reclaimable from the client tax free because they aren't a commute from home to the office you identified in 1.

It's that first point that you need to work out and then work out how much it will cost.

**tcon** · 16 February 2022, 18:14

Thanks for your replies, very helpful, I will try to respond one by one

@northernladuk
- there is a list of 4 Umbrellas and Clarity isn't one of them but I will certainly explore with them "Chargeable expenses" subject
- my client is currently in Germany so it was down to me to determine IR35 status. They are setting up in the UK hence they are now more interested and being more risk averse to class me inside IR35. Hopefully this shouldn't cause any issues !?

@malvolio - apologies for my fonts (just copied from Word and didn't notice)
- paying for travel from my pocket and getting it disbursed back from the client seem simple enough and would solve all my problems! Does it not breach any compliance rules?

@eek
- The office situation is as follows

- client's office will be somewhere central London (I don't know if they found one yet but probably I will not need to go there often if at all),
- project office which is also my client's JV partner's office is near Heathrow - I will probably go there about once a month for 2 - 3 days (I guess that would be the "base office" !?)
- client's main office is in Hamburg, I will probably go there 3 - 4 days / month on average
- other than that I will need to travel to various places (mainly in continental Europe and a bit UK)

- when I train/drive to Heathrow office ~100miles (assume it is the base) and stay there for couple of nights in the hotel will it be classes as "commute"?
- Will I still be able to disburse this cost back directly from client as per malvolio's suggestion or claim as chargeable expense via umbrella? If not it is not big deal I can probably factor it in into my day rate.
- I assume all other travels can be claimed or reimbursed!?
- I take your word for it but I can't understand why my contract can't be home based. Even in a normal full time employment (e.g. in my previous work and long time before covid) number of people who lived at significant distance from the office had home base contracts and normally worked from home. When they needed to travel to the office from time to time they simply claimed it as an expense.

**GhostofTarbera** · 23 February 2022, 22:32

And your not worried if the taxman comes knocking and he finds out you switched from outside to inside and presumes you were inside all along and puts his hand out ?

Travel expenses inside IR35