Two year rule

[lilelvis2000]

Another two year rule question. So far for the past 23 months my ltd. co. has been paying and reimbursing my travelling expenses to my current client. I haven't been on a contract with them for a few months now - but I still go in on most days to do necessary work - which I can only do on-site as they have no external network access.

Sooo... can I still continue claiming travel expenses?

I'd ask my accountant - but while he's great at cooking the books - he probably wouldn't know what I was talking about.

[gingerjedi]

The rules say as soon as you are aware that you will be there more than 2 years you cannot claim, i.e. 18 months in and you get a 12 month extension you have to stop claiming.

[lilelvis2000]

Does this also apply to the season ticket my company buys me? I've looked at IR 176 and don't see a mention of the 24 month rule.

[gingerjedi]

So far for the past 23 months my ltd. co. has been paying and reimbursing my travelling expenses to my current client.

If your client is reimbursing travel expenses you cannot claim through the tax system at all, that is fraudulent, they take a dim view of that type of thing.

[lilelvis2000]

If your client is reimbursing travel expenses you cannot claim through the tax system at all, that is fraudulent, they take a dim view of that type of thing.

I am an employee of my OWN ltd. co., no? "my client" is my employer's client - they are not paying for my travel expenses. I only ask if:
- the 24 month rule applies given I am not on a contract currently but am still mainly travelling to the same location to perform work. Apparently it does.
- the season ticket my employer (my Ltd. co.) buys me for business and pleasure travel is okay and does not incur tax and NIC. still not sure about this.

[MrsGoof]

It has nothing to do with who your employer is... It is a personal taxation issue, and the rules are applied to individuals no matter what the employment status is.

You could change from Contract to Permie to Contract and back to Permie again , all working within the same location (eg City of London) and the 2 year rule would apply, which is simply:

You can not claim (as an individual) travel / subsistence expences from the moment you know you are going to be there beyond 24 months.

It is slightly complicated by the 40% rule thingy, which from your earlier post is not relevant to you.

HTH

edit: I think any excess on your season ticket should be on P11d as BIK
IANAA

[tim123]

Does this also apply to the season ticket my company buys me? I've looked at IR 176 and don't see a mention of the 24 month rule.

A season ticket that your company buys you is taxable (or not) under the normal rules. So if the 24 month period is passed (or never applied in the first place) the capital cost of ticket is a BIK.

It is the interest part of a season ticket loan that is treated differently.

I think you are confusing the two.

tim

[kirk]

How about if the end client for instance reimburses travel to the ltd. at 30p a mile, surely the director can still claim 40p per mile from the ltd. co?

[martinb]

How about if the end client for instance reimburses travel to the ltd. at 30p a mile, surely the director can still claim 40p per mile from the ltd. co?

YourCo can charge ClientCo as much or as little as it wants. It doesn't have to have any bearing on how much you (as a director) claims from YourCo.

But the 2 year rule still applies to YOU. So claiming the 40p per mile after knowing that you will be there for 2+years is breaking the rules.

[lilelvis2000]

A season ticket that your company buys you is taxable (or not) under the normal rules. So if the 24 month period is passed (or never applied in the first place) the capital cost of ticket is a BIK.

It is the interest part of a season ticket loan that is treated differently.

I think you are confusing the two.

tim

Yes the season ticket is non BIK if the cost of it is less than individual business travel - which after two years goes away. I'll just have to bump up my salary to compensate for the additional tax and NIC taken off. Or if I fully repay the season loan (if I got one) which would be pointless.