24 month rule - different ends of London

[Old Greg]

Hi Folks

Will be asking my accountant this as well but interested in views. Am finishing up with current client A after 23 months (ahem). May be going perm but have back up client B lined up.

Client A is in North London. Client B is in South London. I live 100 ish miles from London.

For the last 23 months I have been taking a slightly awkward route because of client A's location in London: drive 10 miles to train station, train, then tube.

I can now take an easier and cheaper route to London: walk across road to train station take train (different line) to London (different terminal), then different tube to client B.

What do we think re travel to client B - allowable expense or not?

[malvolio]

Hi Folks

Will be asking my accountant this as well but interested in views. Am finishing up with current client A after 23 months (ahem). May be going perm but have back up client B lined up.

Client A is in North London. Client B is in South London. I live 100 ish miles from London.

For the last 23 months I have been taking a slightly awkward route because of client A's location in London: drive 10 miles to train station, train, then tube.

I can now take an easier and cheaper route to London: walk across road to train station take train (different line) to London (different terminal), then different tube to client B.

What do we think re travel to client B - allowable expense or not?

Significantly different journey, using HMRC's own examples - different direction, different trains, different terminus. New Location as far as I would be concerned so fully claimable.

[northernladuk]

Regardless of the method of journey how far is it physically? If you took a like for like car journey what would the difference be. I personally wouldn't feel comfortable using the method of journey as evidence of a substantially different journey. How you get there is your choice. I would have thought they would have used a like for like method...

For example, if you come in from the west and have to fork north for 20 miles now... but just fork south for 20 miles for the new gig you might have trouble arguing that is substantially different.

That aside I would probably put this one through. Their example is for the City of London which neither for these are. It is different enough to demonstrate you acted in good faith and at the very worst, IF you get investigated, you fold and pay it back.

[mudskipper]

I think I'd risk it. What's the difference between journey lengths? It sounds like your journey is substantially different.

[Old Greg]

Thanks all. I was thinking of the City of London example and neither of these are.

Only 6 miles apart, but these are genuinely different journeys taken because they are the most sensible, not as a construct to avoid tax.

Of course if you loom at what I assume is the intent of the rule, I could have easily made up my mind to relocate in those two years, but the intent is not the same as the application.

[Old Greg]

I think I'd risk it. What's the difference between journey lengths? It sounds like your journey is substantially different.

Should add, nearly identical journey lengths, but different journeys.

[northernladuk]

Should add, nearly identical journey lengths, but different journeys.

The 40% rule does not mention journeys, it mentions time in the geographical area so even if you can find evidence that the style of transport is an allowable factor in the 'substantially different rule' for 24 months you would fail the 40% rule.

EDIT Ok.. More information to think about....

EIM32283 - Travel expenses: travel for necessary attendance: safeguards against abuse: changes to a workplace: example
An employee is employed on a major bridge construction project. To begin with he works on the north shore for a period that is not expected to exceed 16 months. At the end of that period he is transferred to the south shore for a further 16 months. Crossing the river is inconvenient (which is why a new bridge is needed) and it takes him longer to travel to the south shore than it did to travel to the north shore. It also costs him more. The two sites are not far apart as the crow flies and could be described as a single construction site. However the move from one part of the site to another has had a substantial effect on his journey to work.

The two sites are separate workplaces and are not treated as the same workplace, see EIM32280. His attendance is for a limited duration and the sites are not prevented from being temporary workplaces by the further rule in EIM32080 because he does not expect to be at either for more than 24 months. So a deduction is due for the full cost of travel between his home and each site.

The example does take in to account he has no choice but to take the detour. Your example could argue you have a choice.

What is the cost difference btw?

[Old Greg]

The 40% rule does not mention journeys, it mentions time in the geographical area so even if you can find evidence that the style of transport is an allowable factor in the 'substantially different rule' for 24 months you would fail the 40% rule.

But it does:

This rule is modified where the employee works at a succession of workplaces but the change of workplace has no substantial effect on the employee's journey to work. All such workplaces are treated as the same workplace for the purpose of the legislation, see EIM32280and example EIM32089.

EIM32080 - Travel expenses: travel for necessary attendance: definitions: temporary workplace: limited duration, the 24 month rule

[TheFaQQer]

Significantly different journey, using HMRC's own examples - different direction, different trains, different terminus. New Location as far as I would be concerned so fully claimable.

That would be my interpretation as well - it's a significantly different journey to get to the location, and the difference isn't artificial.

JFCI

[northernladuk]

And another example to consider... Extra tube stops does not count as substantially different as we have been asked in the past.. How tube stops compare to catching trains I don't know though..

EIM32282 - Travel expenses: travel for necessary attendance: safeguards against abuse: changes to a workplace: example
An employee works for an employer who has several offices close to each other in London. Her employer rotates staff around the offices every 18 months. She works at one office and is then moved to another. She travels to work on the Underground and, although she now gets off ten stops further on than previously, her journey is largely unaltered and the price of her ticket does not change.

The new office is not recognised as a new workplace because the change of site has no substantial effect on her journey to work, see EIM32280. Although her attendance at the new office is expected to be for a limited duration it will not be a temporary workplace. Her expected attendance at the single workplace represented by the two offices will be in a period of continuous work that is expected to exceed 24 months, see EIM32080. The new office is a permanent workplace and she cannot deduct the cost of travel between her home and the new office.

I am thinking if the cost of your journey changes you could be ok with your scenario. If they are much the same then god knows....

As interesting as the theory is I would still put this one through personally.