24 month rule again

[speling bee]

Here is my situation.

I have stopped commuting to London just before the 24 month rule kicks in to prevent me claiming travel expenses to London without incurring BIK. All well and good.

I now have a new contract with a base outside London, but travel to London once a week. The train ticket is paid for by the client and booked through their system. Does a BIK charge arise from this, when it is the client, not my Ltd paying for it?

[Alias]

I wouldn't have thought so based on that you are not expensing it directly

[northernladuk]

Here is my situation.

I have stopped commuting to London just before the 24 month rule kicks in to prevent me claiming travel expenses to London without incurring BIK. All well and good.

I now have a new contract with a base outside London, but travel to London once a week. The train ticket is paid for by the client and booked through their system. Does a BIK charge arise from this, when it is the client, not my Ltd paying for it?

The client is paying for it like your laptop, desk and other tools. They want you to travel so they pay. Can't see where there is any benefit to you. It's only subject to BIK if your company was paying and you were getting a personal benefit surely?

Definition of
benefit in kind
HR & Personnel
compensation other than cash given to employee

[speling bee]

Thanks. Interesting that if my Ltd was to pay for it and then invoice ClientCo rather than use ClientCo travel agent, I would have BIK to pay. Doesn't quite seem right, but maybe it is.

[northernladuk]

Thanks. Interesting that if my Ltd was to pay for it and then invoice ClientCo rather than use ClientCo travel agent, I would have BIK to pay. Doesn't quite seem right, but maybe it is.

Why would you have to pay BIK? It isn't a benefit to you. It is wholly and exclusively for business surely.

[speling bee]

Why would you have to pay BIK? It isn't a benefit to you. It is wholly and exclusively for business surely.

If I go to London for work from my home / Ltd address for > 24 months, wholly and exclusively for business, I can't claim it (or pay for it via Ltd) as it's > 24 months. Or have I got this wrong?

But if the client pays, then no BIK arises?

[northernladuk]

You are trying to wind me up aren't you? You are not the Messiah, you are a very naughty boy!!

Any travel you do on behalf of the client you bill back to him via invoice or you get him to pay for you. That's it. Issue closed. There are no expenses therefore no 24 month issue, not benefit so no BIK.

I wouldn't be travelling to London on clients request and paying for it.

Waiting for your next post with bated breath

[speling bee]

You are trying to wind me up aren't you? You are not the Messiah, you are a very naughty boy!!

No, seriously.

Scenario 1

I have a 23 month contract in London (and it's never going to be >23 months). I travel from Birmingham to London every day. MyCo pays, or I pay and claim back. All pukka

I then get a new contract with ClientCo in Birmingham. I travel to London once a week. I pay personally. MyCo invoices ClientCo. for travel (because that is in my contract). Can I claim it back from MyCo without BIK or do I fall foul of 24 month rule?

[SueEllen]

No, seriously.

Scenario 1

I have a 23 month contract in London (and it's never going to be >23 months). I travel from Birmingham to London every day. MyCo pays, or I pay and claim back. All pukka

I then get a new contract with ClientCo in Birmingham. I travel to London once a week. I pay personally. MyCo invoices ClientCo. for travel (because that is in my contract). Can I claim it back from MyCo without BIK or do I fall foul of 24 month rule?

No you don't fall foul of the 24 month rule.

It's part of your services to the client which is why you are invoicing that expense.

You need to make sure you put VAT on that expense like the rest of your invoice if you are VAT registered.

If the client isn't happy about you charging VAT then they have to buy the tickets for you themselves and give them to you.

Edited: Due to the problems this has caused I suggest you check with your client if they are happy to pay the VAT or do they prefer to buy the tickets for you in advance.

[speling bee]

No you don't fall foul of the 24 month rule.

It's part of your services to the client which is why you are invoicing that expense.

You need to make sure you put VAT on that expense like the rest of your invoice if you are VAT registered.

If the client isn't happy about you charging VAT then they have to buy the tickets for you themselves and give them to you.

Edited: Due to the problems this has caused I suggest you check with your client if they are happy to pay the VAT or do they prefer to buy the tickets for you in advance.

Thanks SueEllen - that answers my question, but hypothetically...

If I finish one 23 month contract in London with ClientCo 1, and then start another in London with ClientCo 2, and my contract with ClientCo 2 is such that I invoice for travel, have I dodged the 24 month rule?

I.e. assuming an £1000 / month travel cost (£50 / day on a 20 day month), I am better off (if ClientCo 2 will agree) with a daily rate of £450 per day + using their travel booking service, than £500 per day and paying the travel personally (and not being able to reclaim it because of the BIK).