Returning to UK after a year abroad- relocation claim possible?

[VFV]

I set up my Ltd in Oct-2010 and contracted until January 2012, at which point my contract expired, i left my rented accommodation in London and moved to another EU country. The purpose of the move wasn't business related ( i had to do my -compulsory- military service). I returned to London in November 2012 and stayed in a hotel for several weeks while looking for a contract. I eventually rented a flat but that was before i had secured a new contract.

Would the above scenario qualify for the 8k relocation allowance?

According to the HMRC:

You can qualify for the exemption if
you have to move home to
- take up a new job with a new employer
- take up a new job with your existing employer
- continue your current job but at a new location
your existing home is not within reasonable daily travelling distance of your new workplace
the home you move to is within reasonable daily travelling distance of your new workplace
your employer reimburses your expenses.

I have been employed via my Ltd continuously since 2010 so i am continuing in my current job, and the move to the new location is required by my employer for business reasons- to be able to work on sites in London which would be impossible from my previous residence abroad.

Any thoughts on this?

[northernladuk]

Surely you don't meet the criteria though

- take up a new job with a new employer - You are not doing this.
- take up a new job with your existing employer - You are not doing this
- continue your current job but at a new location - No contract so not doing this.

I would have said you have relocated to find work so do not meet the conditions? Complication is the sham of you being employed by your LTD but without a contract.

EDIT : Wrote the below first but thought about the above later.

Hmmm interesting one but before getting in to whether you can or not maybe just think about what you can actually claim if you could. There is an example on the page below.

Relocation expenses your contractor company can claim :: Contractor UK

As you are moving in to rented accommodation the only costs you could claim is the travel to the new accommodation and the hotel stay so you won't get anywhere near the 8K as you just haven't incurred any costs as you would if you were moving house.

They are mentioned at the bottom of the page you referenced.

HM Revenue & Customs: Income tax and National Insurance contributions on relocation packages

What if I move to or from the UK?
The same rules apply to any help you get from your employer if you are coming to work in the UK from abroad, or moving to work abroad from the UK. You are entitled to the £8,000 exemption in the usual way.
If you are not domiciled in the UK and you came to work here after living abroad, in addition to the £8,000 relocation exemption, you are entitled to two further tax reliefs.

You are entitled to a tax deduction for all your travel costs between the UK and your home abroad which are paid for by your employer, for up to five years, providing certain conditions are met.
If you are in the UK for 60 or more consecutive days, your employer can pay for your spouse and children to visit you or to travel with you to and from the UK - up to two trips a year for up to five years.

[VFV]

- continue your current job but at a new location - No contract so not doing this.

Strictly speaking the employer here is my Ltd and not the client so one can argue that whether the Ltd has contracts or not is irrelevant? Also doing the groundwork to secure contracts isn't in itself a task that I, as an employee, undertake for the Ltd, that requires me to relocate and therefore puts me in the 'current job new location' bracket?

Re the £8k yes, £8k is the upper limit for the allowance and has to be matched against receipts, my expenses are around £3k and if within my rights i'd be happy to claim them as much as the next man.

[borderreiver]

I would imagine this is a massive red flag for HMRC. You would have to be able to prove pretty convincingly that the move was for business purposes only for it to go through.

[northernladuk]

I would imagine this is a massive red flag for HMRC. You would have to be able to prove pretty convincingly that the move was for business purposes only for it to go through.

This is what I think as well but can't find an exact rule. If you were relocating for a role yes, to move away and come back to look for work I just don't see it flying but it's a complicated one.

Need one of our accountants to really give us the low down but there is always the thought that you put it through and argue it IF you ever get investigated and be prepared to pay it back. It's complicated enough to give HMRC something to think about so it's not like you are openly trying to defraud or anything.

Now you are back and working do you not have an accountant, why not ask him?

[ASB]

The thing is that this is designed to cope with normality. It assumes your co has a genuine substantive base really. I dont believe that you genuinely fit any of the criteria.

However, you could at a bit of atretch argue that is carry on job at a new location. But to all intents and purposes you individually are making an active choice for this. Rather than veing made an offer and choosing to accept it. Its the fact that the location is under your control.

But if you believe its close enough give it a go.

Its a bit like making yourself reduntant and taking 30k tax free. Sone have. Most probably not challenged. But if challenged hmrc will take some convincing. But you might manage it.

[DirtyDog]

You can qualify for the exemption if
you have to move home to
- take up a new job with a new employer
- take up a new job with your existing employer
- continue your current job but at a new location
your existing home is not within reasonable daily travelling distance of your new workplace
the home you move to is within reasonable daily travelling distance of your new workplace
your employer reimburses your expenses.

First two criteria are out, since you aren't doing that. So it comes down to whether you are continuing your current job but at a new location. Where is the company based - will the location be different?

Another thought is that if you are claiming relocation expenses, then you aren't going to be able to claim any expenses during the contract - so do the sums add up to claim something which may be marginal at best?