Mileage claims and "associated" employers

[gadgetman]

I am in my first year back in contracting. My previous permie employer paid me mileage for business travel.

As per the HMRC factsheet:

http://www.hmrc.gov.uk/mileage/employee-factsheet.htm

(the "What if I travel on business for more than one employment?" section)

when I took on my first contract I reset the mileage "clock" as the two employers were obviously not "associated".

My question is, for the purposes of this rule am I right in taking my employer to be myco ltd and therefore when moving contracts the employer remains the same and so triggers the association rule every time?

If this is the case then hypothetically if I were to close myco ltd and open myco #2 ltd for a new contract would I also be able to reset the clock or would I fall foul of the second clause within the association rule?

[Gonzo]

I am in my first year back in contracting. My previous permie employer paid me mileage for business travel.

As per the HMRC factsheet:

http://www.hmrc.gov.uk/mileage/employee-factsheet.htm

(the "What if I travel on business for more than one employment?" section)

when I took on my first contract I reset the mileage "clock" as the two employers were obviously not "associated".

My question is, for the purposes of this rule am I right in taking my employer to be myco ltd and therefore when moving contracts the employer remains the same and so triggers the association rule every time?

If this is the case then hypothetically if I were to close myco ltd and open myco #2 ltd for a new contract would I also be able to reset the clock or would I fall foul of the second clause within the association rule?

Your workplace is independent of whom you work for.

You can claim travel expenses for travel to a "temporary workplace".

For most contractors, the main workplace is their "home office" and when they are on a client's site that counts as a "temporary workplace", and they expense travel to their co for travelling from home to the client's site.

The rules are a little complex but in a nutshell a "temporary workplace" ceases to be a "temporary workplace" once you know that you will be travelling there for more than 24 months for more than 40% of the time.

It is location that is important, not employer, so if you take a 12 month contract with one client, and then sign another 12 month contract with another client that is next door to the previous one, it no longer counts as a "temporary workplace" and is now "ordinary commuting" so you can no longer claim.

[gadgetman]

Think you've missed the point of my post. This is not about defining temporary workplace or the 24 month rule (which I am familiar with).

This is a separate issue about resetting the 10,000 miles at 40p "clock" due to changing "employer".

[Billy Pilgrim]

Your employer is your company.

You can claim. from YOUR COMPANY: first 10K at 40p per mile -- rest at 25p (April to April - someone back me up on this)

You can however still get the client to pay 40p per mile (except that you personally will only be able to take 25p per mile)

Excess will be profit, but taxable

[gadgetman]

Again, all very interesting but still not really addressing the point of my query. I've obviously not explained it very well.

In any one year you can claim expenses from your employer of 40p per mile up to 10,000 miles and 25p thereafter. My query is about being able to reset the count of miles you have claimed due to changing "employer".

To keep it simple, assume I am a permie and work for employer #1 and travel 12,000 miles. I claim 10,000 miles at 40p and 2000 at 25p. Within the same tax year I move job to employer #2 and do another 5000 miles.

The guidance pointed to in my original link (see above) says that for employer #2 (assuming employer #1 and employer #2 are not 'associated') I can start again and claim for these 5000 miles at 40p.

My query is about applying this to the contract world.

[VectraMan]

I changed from an umbrella to my own limited, and my accountant told me that the mileage allowance is personal and nothing to do with your employer. So the clock is not reset.

So unless that's changed in the last 2 years, it appears what I was told was wrong.

I would think though, closing your Ltd. and starting a new one, the two companies would be under the same control (i.e. you) and so they would be considered associated.