The 2 year rule and travel expenses

[oldtimer45]

Having just renewed on a contract which takes me over 24 months, I am no longer able to claim travel and subsistence to/from my normal workplace (now regarded as my permanent workplace by HMRC) -

By the way I am contracting through an umbrella (Parasol) as a PAYE employee

However, the company often sends me to other sites many miles away at various times for various reasons, and looking at the HMRC 490 guidelines it seems I can still claim for these, as they are of a temporay nature and for self-contained reasons.

My unmbrella expenses depts are currently saying no to this, but I think they just don't understand the guidelines - can anyone help?

[malvolio]

The rule covers travel to your normal pace of work, as you say. Travel to other sites is not travel to your normal place of work, hence should be claimable. Arguably, you should reduce that claim by the distance you normally travel in order to prevent any claims that you are gaining a BIK.

[czczcz999]

I've got the same problem with Parasol, they don't seem to be reading the clear definitions laid out in the HMRC rules.


---Soap box mode on----
There is a clear difference between a normal place of work and a temporary place of work.

The HMRC guidance for the dividing line is 40%, in that working at a location for greater than 40% of your time makes it your normal place of work.

I detailed the position in an email to them including references and pointers to the relevant HMRC guides but they simply said that I can't claim travel and subsistance expenses anymore. There was no explaination of their position given the HMRC guideline.

The basis for the rule is simple, HMRC believe that after 2 years you are considered an employee of the client. At that point you should not claim travel expenses (like any normal employee who can't claim travel to work expenses).

That's fine, and I don't have a problem with it as such, but Parasol say no travel expenses, when if you were a company employee rather than a contractor, you could claim travel expenses for journeys to other than your place of work.

---Soap box mode off----

I could maybe understand Parasol's stance if say a contractor was borderline and they just weren't prepared to risk it, but they don't say that, and in my case I clearly work over 90% of my time at one location.

I've phoned a couple of other umbrella companies to see what they say, and the response was similar.