Oyster Card

[Davey78]

I'm trying to decipher the rules on using Oyster and reimbursing myself for the travel (Ltd co, outside IR35, temporary workplace, etc.). Some searching reveals that this has come up in the past, but there was never any general agreement about what is the correct thing to do.

I've been looking through the HMRC guidelines here: http://www.hmrc.gov.uk/manuals/eimanual/EIM16066.htm

Under the "Travel card provided for business journeys but available for private use" section, it says:

An employee can seek a deduction for an amount that is equal to the lesser of

* the total cost of the individual business journeys undertaken with the travel card (if paid singly), and
* the cost of the travel card.

Therefore, it would seem that the following arrangement would be ok:

I buy a weekly Zone 2 travelcard (to cover the commute to current workplace), which is £23.20, out of my personal bank account. The fare to/from work is £2 each way, so for a normal week that's £20 business journeys, which is less than the cost of the travelcard. Therefore, I reimburse myself for the individual journeys (£20 for a normal week) and the balance (£3.20) has been paid myself, resulting in no BiK.

This seems to be correct according to the link above, but I'd appreciate if it if someone could give a definite yay or nay.

[minstrel]

Your logic sounds right to me.

[Davey78]

Cheers minstrel - always good to get a second opinion on these things.

[zathras]

I'm trying to decipher the rules on using Oyster and reimbursing myself for the travel (Ltd co, outside IR35, temporary workplace, etc.). Some searching reveals that this has come up in the past, but there was never any general agreement about what is the correct thing to do.

I've been looking through the HMRC guidelines here: http://www.hmrc.gov.uk/manuals/eimanual/EIM16066.htm

Under the "Travel card provided for business journeys but available for private use" section, it says:



Therefore, it would seem that the following arrangement would be ok:

I buy a weekly Zone 2 travelcard (to cover the commute to current workplace), which is £23.20, out of my personal bank account. The fare to/from work is £2 each way, so for a normal week that's £20 business journeys, which is less than the cost of the travelcard. Therefore, I reimburse myself for the individual journeys (£20 for a normal week) and the balance (£3.20) has been paid myself, resulting in no BiK.

This seems to be correct according to the link above, but I'd appreciate if it if someone could give a definite yay or nay.

My accountant has always used 5/7ths of the total cost. So with yours that would be £16.57 business cost.

[fzbucks]

My accountant has always used 5/7ths of the total cost. So with yours that would be £16.57 business cost.

I'd agree with what the HMRC say over your accountant, 5/7ths may work wll as a rule of thumb but looks like he's found the correct answer from the horses/hectors mouth