Quick mileage question

[d000hg]

I searched the forum but the nearest to an answer I found was "you can claim business mileage as long as it's not to a settled place of work". I don't know what that phrase means, my question is in what cases can('t) business mileage be reclaimed back (at 40/25p rates) for travelling to client site? Is "settled" a special legal definition, such as the 2-year rule I've heard about, or more nebulous like IR35?

Thanks.

[NotAllThere]

AIUI the 2-year rule is exactly about defining the settled place of work.

[xoggoth]

There are actually two ruels for what's settled:

The two year rule says you can only claim up to the point you are, or expect to be, at same geographical location. Same location means the journey is not substantially different.

The 40% rule. Even if 2 year rule applies, if you work there less than 40% of your working time you can still claim.

[MPwannadecentincome]

There are actually two ruels for what's settled:

The two year rule says you can only claim up to the point you are, or expect to be, at same geographical location. Same location means the journey is not substantially different.

The 40% rule. Even if 2 year rule applies, if you work there less than 40% of your working time you can still claim.

ooh the 40% rule - I never heard of that one before - I better look into it....

[d000hg]

Thanks guys, clears it up nicely. Driving 45 miles a day it's a nice boon to be able to take an additional £350/month untaxed out of the business account.

[ASB]

Thanks guys, clears it up nicely. Driving 45 miles a day it's a nice boon to be able to take an additional £350/month untaxed out of the business account.

That's not necessarily the most efficient way of doing it. If you are a 40% tax payer you MIGHT be better off claiming nowt from the company and simply claiming on your personal tax return. I've posted up some numbers before which it might just be worth your while to check and see if it applies to your particular circs. Basically if you are a 40% taxpayer as a result of dividend income it's worth checking out overall numbers - potentailly you suffer CT at 21% but get relief at 40%.

[d000hg]

Interesting idea, didn't know it was possible to do it that way. However I don't expect to be paying much if any at the 40% rate... this financial year I've yet to take ANY dividends and though some profits are building up I don't think they'll push me that high overall.

[xoggoth]

Would that apply also to using own PC and claiming capital allowances via the personal route?

[ASB]

Would that apply also to using own PC and claiming capital allowances via the personal route?

Possibly, but the major issue would be getting a personal PC into a position in which capital allowance could be claimed. I expect it would fail on exclusivity. However, you are not expected to out assets at your company disposal free.

If you happen to have a personal PC which you use for business then you could charge the company rent. Though this would become personal income and would therefore only be effective if your personal tax rate was less than the rate the renter would suffer.

However, if the PC was related to a self employed business stream that the capital allowance can - as far as I am aware - only be offset against that income. By definition this means that the relief you get will be at your marginal tax rate anyway.