2 Year Rule - Charging Clientco for travel

[opc]

I have been on contract at the same clientco (albeit different businesses and sites) for 2.5 years. I am no longer claiming mileage for travelling to this (now non-temporary) place of work....BUT it is legitimate to be charging clientco the time for travelling from my company's head office to their premises...right? I am on an hourly rate.

[TykeMerc]

I have been on contract at the same clientco (albeit different businesses and sites) for 2.5 years. I am no longer claiming mileage for travelling to this (now non-temporary) place of work....BUT it is legitimate to be charging clientco the time for travelling from my company's head office to their premises...right? I am on an hourly rate.

If the client is happy to pay it yes of course it is.

If the clients sites are in substantially different locations then that plus you charging for travel time tends to indicate that you're not commuting but business travelling.

The 24 month rule is only applicable to location not client so if you don't work on the same site consistantly for most of the time you don't need to worry about it.

[centurian]

I have been on contract at the same clientco (albeit different businesses and sites) for 2.5 years. I am no longer claiming mileage for travelling to this (now non-temporary) place of work....BUT it is legitimate to be charging clientco the time for travelling from my company's head office to their premises...right? I am on an hourly rate.

Even if ClientCo pay (most will baulk at it), remember that you will have to pay tax on the additional amount because it will all become a BIK.

However, you will probably still be better off. Assume you have 5K travelling and you are paid 20K pa over the 40% threshold (makes the calculations simpler)

Previous = 20K-5K = 15K taxable = 9K net
Current = 20K taxable - 5K afterwards = 7K net
ClientCo pays = 25K taxable - 5K afterwards = 10K net

This is assuming that you haven't been working at different client sites (the office building in the next street won't count). If your journey has changed over this period, you may be able to continue claiming travelling.

Of course you can still try and charge ClientCo for travelling, even if you are still able to claim expenses as an individual. After all, your current travelling expenses comes out of your hourly rate.

[malvolio]

Even if ClientCo pay (most will baulk at it), remember that you will have to pay tax on the additional amount because it will all become a BIK.

Not it's not, it's a cost of sales. You're not a permie (I assume...). Your day rate includes getting you to your normal place of work every day. If you incur extra costs going somewhere else for some reason, you are adding this extra to your charges. It's nothing to do with personal income and BIKs.

And, BTW, it's a very good reason for using a company card for all company expenditure, so you don't muddle up company and personal money. Ever.

[centurian]

Not it's not, it's a cost of sales. You're not a permie (I assume...). Your day rate includes getting you to your normal place of work every day. If you incur extra costs going somewhere else for some reason, you are adding this extra to your charges. It's nothing to do with personal income and BIKs.

And, BTW, it's a very good reason for using a company card for all company expenditure, so you don't muddle up company and personal money. Ever.

But I don't think that's what the OP is asking. ClientCo aren't asking him to go anywhere special - just their normal premises where he has been going for some time. The OP wants ClientCo to compensate him for the fact that he can no longer claim travelling expenses under the 24 month rule.

Basically he wants to be paid more - nothing wrong with that. But the effect is that LtdCo gets more income. What LtdCo pays to Director/Employee will remain a BIK as he is already over the 24 month rule - hence the extra amount "for expenses" is subject to tax.

Perhaps the OP can clarify the situation. If my assumptions about the OP are wrong, then I've simply answered a different question

[malvolio]

Reading it properly ( ) the OP is asking if he can charge routine travelling time, not expenses. To which the answer is there's no reason not to do so legally, but your client might not be very happy: in fact, if I were the client I'd not pay it and ask embarassing questions about 10 hours charges for 8 hours work.

I think you and I were answering a rather more intelligent question....

[TroubleAtMill]

opc,

What kind of justification are you going to give to the ClientCo in requesting a payment for travel time, in this economic climate, when you were happy with not asking for it for the last 2.5 years?

I would suspect, if you told them it is because you are losing out on tax, their reply is for you to manage your costs better...

Then again, who dares wins and all that

[centurian]

I would suspect, if you told them it is because you are losing out on tax, their reply is for you to manage your costs better...

Ironically it may be an easier "sell". Knew a contractor that had a very long commute and when the 2 years came up, he said he couldn't afford to remain - after all the best way to "manage costs" is to service a client closer to home.

He asked for a rate rise to cover this. Never found out whether he got it, but it seemed to be viewed in a better light than an outright demand for more money.

In the end, if they think you're worth it, they'll pay.

[NotAllThere]

If you're based at HQ, then, generally*, you can claim the travel to the other premises as an expense, without incurring a BIK charge. This is about your personal tax.

Yourco charging the client is entirely a contractual issue.

Don't confuse the two. The client should not be paying you directly for the mileage.


*Check the rules carefully, especially the 40% bit.

[opc]

Reading it properly ( ) the OP is asking if he can charge routine travelling time, not expenses. To which the answer is there's no reason not to do so legally, but your client might not be very happy: in fact, if I were the client I'd not pay it and ask embarassing questions about 10 hours charges for 8 hours work.

I think you and I were answering a rather more intelligent question....

Correct. I am not trying to claim expenses. It just occurred that if other suppliers head office is say in London, and they travel to Bristol to work for the client, they would charge the client travel time.