24 month rule - different ends of London

[northernladuk]

One more example and it is based very much around 'Square Mile' of London - not my case:

But your case is only 6 miles away and your journey, although convoluted, could be argued to be 'broadly' the same. This is the example that is causing me the most confusion by having the term 'broadly' in it. That term alone opens the can of worms we are discussing now in my mind.

[Old Greg]

But your case is only 6 miles away and your journey, although convoluted, could be argued to be 'broadly' the same. This is the example that is causing me the most confusion by having the term 'broadly' in it. That term alone opens the can of worms we are discussing now in my mind.

IMO you are making the error I described above of thinking that destination in itself defines journey. HMRC is clear in one of its examples that a change in destination is not significant because the journey remains broadly the same (and the ticket price).

The 'broad sameness' of the journey cannot be the 'broad sameness' of the destination as that would not take into account modes of transportation and route. (unless, I suggest the journey is only being changed for the purpose of a resetting the clock, which isn't true in my case).

Put another way: If my journey was simply A to B or A to C, then HMRC would allow you to claim the cost of the journey on a mileage only basis. But they don't. You claim for the real cost, which is the miles drive, the parking and the train ticket.

[Craig at Nixon Williams]

The difference is 6 miles out of a 100 mile journey, that's a mighty small proportion to try and argue that it is substantially different...

Craig

[Old Greg]

The difference is 6 miles out of a 100 mile journey, that's a mighty small proportion to try and argue that it is substantially different...

Craig

Thanks again Criag. But that six miles is the difference between the destinations, not the journeys. HMRC differentiates in their examples between destinations, journeys and ticket prices. Am I missing something?

[Maslins]

The difference is 6 miles out of a 100 mile journey, that's a mighty small proportion to try and argue that it is substantially different...

My thoughts would be in line with Craig's.

My humble opinion is that the two years is in there as HMRC feel if you know you'll be working "there" longer than that, and the cost bothers you, you'd move home to be closer. They wouldn't expect someone to move home for a 3 month contract though.

If you live 100 miles away from North London, you also live near as dammit 100 miles away from South London. If you'd moved closer to destination 1, it wouldn't be a coincidence that you'd also have moved closer to destination 2.

If on the other hand you lived in Central London, and went from commuting to North London to commuting to South London, then I'd suggest that is a completely different journey, as moving closer to destination 1 would mean moving further away from destination 2.

Having said all that, if it were me and I wasn't an accountant, I'd probably stick it through and try to argue the toss if challenged.

[Old Greg]

My thoughts would be in line with Craig's.

My humble opinion is that the two years is in there as HMRC feel if you know you'll be working "there" longer than that, and the cost bothers you, you'd move home to be closer. They wouldn't expect someone to move home for a 3 month contract though.

If you live 100 miles away from North London, you also live near as dammit 100 miles away from South London. If you'd moved closer to destination 1, it wouldn't be a coincidence that you'd also have moved closer to destination 2.

If on the other hand you lived in Central London, and went from commuting to North London to commuting to South London, then I'd suggest that is a completely different journey, as moving closer to destination 1 would mean moving further away from destination 2.

Having said all that, if it were me and I wasn't an accountant, I'd probably stick it through and try to argue the toss if challenged.

And here is the difficulty. You are, absolutely right I am sure in the intent of the rule, but they do bang on in their examples about journeys and ticket prices in addition to location of work.

It would have been simpler if they said.

Because her work has only moved 10 tube station, the expense is not allowable regardless of whether she now needs to take a completely different route and her ticket price has changed. But they don't say that, so I still can't help thinking that the route and ticket price is relevant.

[northernladuk]

How about a different spin on this. You say...

The cost my current way is £830 + £100 parking + 250 miles per month
Of which you only get 20% relief = 186 so cost to you is £744

If the cost of the new way is £690 per month so it is still costing you less. Happy days

[Old Greg]

How about a different spin on this. You say...

The cost my current way is £830 + £100 parking + 250 miles per month
Of which you only get 20% relief = 186 so cost to you is £744

If the cost of the new way is £690 per month so it is still costing you less. Happy days

That is hardly the point.

[Craig at Nixon Williams]

How about a different spin on this. You say...

The cost my current way is £830 + £100 parking + 250 miles per month
Of which you only get 20% relief = 186 so cost to you is £744

If the cost of the new way is £690 per month so it is still costing you less. Happy days

It's not quite as simple as that...remember that the £690 would come out of Old Gregg's personal income!

Lets say he takes salary and dividends each year up to the higher rate tax threshold and takes home £38,074.60 per year (excluding the reimbursement of his expenses). If he wants to achieve the same take home after having paid his travelling expenses he will incur higher rate tax of £2,760 (690 * 12 / 0.75 * 0.25).

Are you really cut out to be an accountant?

[northernladuk]

That is hardly the point.

I know, was just trying a bit of blue sky thinking and coming in from left field to help with the decision making....

It's not quite as simple as that...remember that the £690 would come out of Old Gregg's personal income!

Lets say he takes salary and dividends each year up to the higher rate tax threshold and takes home £38,074.60 per year (excluding the reimbursement of his expenses). If he wants to achieve the same take home after having paid his travelling expenses he will incur higher rate tax of £2,760 (690 * 12 / 0.75 * 0.25).

Are you really cut out to be an accountant?

I know, I know... was just trying to soften the blow if he decides not to carry on claiming...

I will file that idea under 'Failed'