Mileage and 24 month rule

[ChimpMaster]

<snip>I don't think Lisa understood the example. Chimp is trying to say because he is on call he counts that as time away from work so making it look like the 35 hours is part of the working day. I would not count oncall as part of the working day.

I appreciate your point of view but it's not that I'm trying to snake my way out of tax - I'm just trying to see where the boundaries lie given that the rules are ambiguous. As far as I understand, the 40% applies to ALL time related to the services provided by the employee, including travel, accounting, admin, work etc.

My travel expenses are only ~£200 a month - it's not going to kill me to pay the additional tax. I'm just trying to understand HMRC's convulated rules and to understand where I stand within them.

[northernladuk]

I appreciate your point of view but it's not that I'm trying to snake my way out of tax - I'm just trying to see where the boundaries lie given that the rules are ambiguous. As far as I understand, the 40% applies to ALL time related to the services provided by the employee, including travel, accounting, admin, work etc.

My travel expenses are only ~£200 a month - it's not going to kill me to pay the additional tax. I'm just trying to understand HMRC's convulated rules and to understand where I stand within them.

Agreed but again think about it.. how can you count on-call as time. The whole point of it is so you can get on with your personal life but be contacted if need be. That is hardly time working. There has to be some common applied.

[malvolio]

Agreed but again think about it.. how can you count on-call as time. The whole point of it is so you can get on with your personal life but be contacted if need be. That is hardly time working. There has to be some common applied.

Agreed. The rules are actually clearly stated and there is no ambiguity - provided you don't look for obscure interpretations of various bits of phraseology. The problem is they weren't framed for nomads like us.

Also, if you want to start getting complicated, consider the umbrella user who only has one contract through that umbrella. His place of work has to be his client's site, since he has no alternative. So why is he claiming expenses in the first place?

[SueEllen]

ME
"Need some clarification.

I have just moved with my end-client of 5-6 months out to Canary Wharf from St Pauls in the City.

I had previously been working for another bank in the City so stopped claiming expenses back in 2009.

Can I start claiming travel expenses again, now that I am in a different location and within the 2 years with the current client?

A grey area. "

ACCOUNTANT
"As you have moved location, you are allowed to claim on expenses.

This is presuming that you will not be at this location for more than 24 months."


Are they liable if wrong?

They aren't liable.

However Canary Wharf is Zone 2 (Jubilee line) and St Paul's is in Zone 1 (Central Line) so you could easily prove that your journey was different.

[northernladuk]

They aren't liable.

However Canary Wharf is Zone 2 (Jubilee line) and St Paul's is in Zone 1 (Central Line) so you could easily prove that your journey was different.

Different but not meeting the following...

This rule is modified where the employee works at a succession of workplaces but the change of workplace has no substantial effect on the employee's journey to work. All such workplaces are treated as the same workplace for the purpose of the legislation, see EIM32280and example EIM32089.

If you were permie this wouldn't be considered an unreasonable change and you would not relocate to do it.

[SueEllen]

Different but not meeting the following...
.

It depends where you live in London and the SE on whether going to St Pauls and Canary Wharf is a significant change on your journey to work.

For me and quite a few people I know it is.

In regards to permies relocationing I know a contractor who has point blank refused to work in Canary Wharf due to how long it takes to get there for them but have happily worked in North, South and West London.

Just because something is in London and on the tube map doesn't mean it takes a reasonable time to get there, your journey is significantly the same and it costs the same.

HMRC published a more in depth booklet on travel expenses. (Google for HMRC booklet 490 ) They give you the example of 10 stations difference in London.

Edited to say: The permies I know who have had difficult journeys to work only stick with the job for a year. I've worked in the Thames Valley with lots of other people from London and they would only stick it for a year.

[Wanderer]

HMRC published a more in depth booklet on travel expenses. (Google for HMRC booklet 490 )

84 pages long. I lost the will to live after about 20 pages. Surely I can't be expected to read and understand an 84 page document explaining what a commute is or isn't. Nightmare.

What if I do due diligence by asking my accountant for advice and claim what they tell me I'm allowed to. The worst that would happen is that MyLTD gets investigated and HMRC interpret the rules differently so I have to pay up the tax I avoided. I can't see how they could levy a penalty based on that 84 page waffle, tax shouldn't be taxing should it?

[potentialcontractor]

I tried reading the same HMRC document and wished I hadn't as I'm more confused now than I was before!

My situation is that I was working at Location A for 23 months. Then I got a new contract at the opposite end of the country which lasted for just two weeks (don't ask). Then the original client took me back with a new contract back at Location A again. Is a two week break with a different client enough to reset the 24 month rule? And before anyone asks, it's a 130 mile daily commute so the mileage is worth it.

[captainham]

I tried reading the same HMRC document and wished I hadn't as I'm more confused now than I was before!

My situation is that I was working at Location A for 23 months. Then I got a new contract at the opposite end of the country which lasted for just two weeks (don't ask). Then the original client took me back with a new contract back at Location A again. Is a two week break with a different client enough to reset the 24 month rule? And before anyone asks, it's a 130 mile daily commute so the mileage is worth it.

I would say 'no chance' if you look at section 3.16 of the document I assume you're referring to.

http://www.hmrc.gov.uk/helpsheets/490.pdf

[malvolio]

I tried reading the same HMRC document and wished I hadn't as I'm more confused now than I was before!

My situation is that I was working at Location A for 23 months. Then I got a new contract at the opposite end of the country which lasted for just two weeks (don't ask). Then the original client took me back with a new contract back at Location A again. Is a two week break with a different client enough to reset the 24 month rule? And before anyone asks, it's a 130 mile daily commute so the mileage is worth it.

No. End of.

Start from the known end of your current contract. Count back 24 months. Have you spent more than 40% of your time on a client site at that location (using HMRC's definition of a location as being something substantially the same journey away). If you have, yuo can't claim expenses. Also note I said "known end date". If you fail the above test stop claiming immediately.

So what's the answer in your case...?