24 months again

[malvolio]

A guy I used to work with lives in Scotland. His employer's company provided him as a consultant to ex-clientCo. He was a regular employee - not a director. His employer paid all his hotel and travel expenses. After 2 years, Hector came knocking for BIK tax on the expenses.

Which is perfectly correct if he's only ever worked at the one location - after 24 months it becomes your permanent place of work.

And which is the point I missed in my original reply...

As long as you work at more than one client location, then the rule won't apply. Stay still and it will.

[TheFaQQer]

I suspect I know the answer but - does becoming a permie employee of a consulting firm reset the clock?

No.

[ASB]

Which is perfectly correct if he's only ever worked at the one location - after 24 months it becomes your permanent place of work.

And which is the point I missed in my original reply...

As long as you work at more than one client location, then the rule won't apply. Stay still and it will.

The rules are exactly the same. Geographical location etc

[Peoplesoft bloke]

OK thanks all - I think I need to take some action on this before/in case Hector comes knocking.

[centurian]

I thought that the 40% rule applied just as much to permies as it did to contractors - and switching between contract and permie makes no difference. It's a personal tax applied at the individual level based upon geographical location.

My understanding is that if an employee works 50/50 between two sites (and expected to for 24 months), then travel to either site is considered normal commuting - even if the employer covers the cost of travelling to the more distant site.

And while "contact HR" may be a default response, it isn't really the employers problem. The issue isn't whether the employer will pay for the travelling. It's whether HMRC consider that payment to be a BIK - and that is based upon the behaviour of the individual, potentially before they even joined that firm.

I suspect there are quite a few roving permies who would be caught by this, but are completely unaware of the rules.

[malvolio]

I thought that the 40% rule applied just as much to permies as it did to contractors - and switching between contract and permie makes no difference. It's a personal tax applied at the individual level based upon geographical location.

My understanding is that if an employee works 50/50 between two sites (and expected to for 24 months), then travel to either site is considered normal commuting - even if the employer covers the cost of travelling to the more distant site.

And while "contact HR" may be a default response, it isn't really the employers problem. The issue isn't whether the employer will pay for the travelling. It's whether HMRC consider that payment to be a BIK - and that is based upon the behaviour of the individual, potentially before they even joined that firm.

I suspect there are quite a few roving permies who would be caught by this, but are completely unaware of the rules.

Well yes, but it all hangs on the definiton of yuor permanent workplace. Most - but obviously not all - permies have a clearly defined one, so everything else must be temporary. But the rule is, as we all know, complete bollocks and needs to be revisited.

And HR are involved since it it they who are responsible for your PAYE, which includes any BIKs arising from your employment, be it travel of medical insurance.

[TheFaQQer]

And while "contact HR" may be a default response, it isn't really the employers problem. The issue isn't whether the employer will pay for the travelling. It's whether HMRC consider that payment to be a BIK - and that is based upon the behaviour of the individual, potentially before they even joined that firm.

It becomes the employers problem when the employee refuses to travel to that project / site because they will be paying for it themselves. Some big consultancies will pay a bonus equivalent to the additional tax in that case.

If my employer expects me to travel to another site, then I expect them to pay for it. If that means there is an additional tax liability, then I expect the employer to meet that as well.