Moving from umbrella to ltd on renewal

[speling bee]

You're a toad

Thank you very much.

[Contreras]

In the example outlined here, my opinion is that Joe wouldn’t be able to claim anything for travelling to bank #2 as the 24 month rule takes priority because he is working in the same geographical location.

Thanks. I completely screwed up that analogy though.

Say Joe was only in his 'permanent' job at bank #1 for 15 months.
He quits his job and gets a 6-month contract (via ltd) at bank #2.
After 6 months his contract is renewed for a further 6 months.

For what duration can he claim BIK free travel expenses?

The 1st employment is a permanent workplace, regardless of duration. A subsequent contract at the same location could either be seen as temporary workplace, for up to 24 months, or a permanent workplace immediately.

I appreciate that the guidance is open to interpretation. I'm struggling to see how one could go from being at a permanent workplace, to then being at a temporary workplace (same location) but for only a few months, before being classed as permanent workplace again. Me thinks it should be either all or nothing.

[dty]

In my next gig I'll be claiming mileage. Thank heavens it's motorbike miles so this 10,000 mile thing doesn't affect me!

[Craig at Nixon Williams]

Thanks. I completely screwed up that analogy though.

Say Joe was only in his 'permanent' job at bank #1 for 15 months.
He quits his job and gets a 6-month contract (via ltd) at bank #2.
After 6 months his contract is renewed for a further 6 months.

For what duration can he claim BIK free travel expenses?

The 1st employment is a permanent workplace, regardless of duration. A subsequent contract at the same location could either be seen as temporary workplace, for up to 24 months, or a permanent workplace immediately.

I appreciate that the guidance is open to interpretation. I'm struggling to see how one could go from being at a permanent workplace, to then being at a temporary workplace (same location) but for only a few months, before being classed as permanent workplace again. Me thinks it should be either all or nothing.

He would not be able to claim anything for the 15 months that he worked at Bank #1 as he expected that to be his permanent workplace at that time.

When he starts contracting, he would be able to claim it for the initial 6 month contract because it is no longer a permanent workplace and the total time at that location is still under 24 months at the end of that contract. From the point that he accepts the extension he would not be able to make any further claim.

As you say, the guidance is open to interpretation – the above is merely my opinion.

Craig

[speling bee]

He would not be able to claim anything for the 15 months that he worked at Bank #1 as he expected that to be his permanent workplace at that time.

When he starts contracting, he would be able to claim it for the initial 6 month contract because it is no longer a permanent workplace and the total time at that location is still under 24 months at the end of that contract. From the point that he accepts the extension he would not be able to make any further claim.

As you say, the guidance is open to interpretation – the above is merely my opinion.

Craig

It's complex, but I'm not sure that's correct.

But if it is correct, he could start claiming from the moment he gave his notice in at the permanent workplace.

[Craig at Nixon Williams]

It's complex, but I'm not sure that's correct.

But if it is correct, he could start claiming from the moment he gave his notice in at the permanent workplace.

No relief could be claimed when working for Bank #1 even after notice has been given because the journey will simply be viewed as ordinary commuting.

A quick caveat on what I said earlier: Joe could only make a claim for travel to Bank #2 if at the time of the claim; Joe expects to get another contract at a separate location after the contract with the bank ends.

[speling bee]

No relief could be claimed when working for Bank #1 even after notice has been given because the journey will simply be viewed as ordinary commuting.

A quick caveat on what I said earlier: Joe could only make a claim for travel to Bank #2 if at the time of the claim; Joe expects to get another contract at a separate location after the contract with the bank ends.

If travel to the same location can become allowable when a formerly permanent location (which seems dubious to me) becomes a temporary location, then why should the trigger be change of employment rather than handing in notice? This is why it seems very suspect to me. I would think that once a location is permanent it cannot become temporary.

[ContrataxLtd]

If travel to the same location can become allowable when a formerly permanent location (which seems dubious to me) becomes a temporary location, then why should the trigger be change of employment rather than handing in notice? This is why it seems very suspect to me. I would think that once a location is permanent it cannot become temporary.

Hi Spelling Bee

Just to give my 2p's worth.

Joe's time at Bank #1 was a permanent location because he had no other location for work i.e. had had to work at the bank under that employment. Now that he's gone contracting his permanent location is his home office and Bank #2 becomes a temporary location so he can start claiming travel expenses up until the point he expects to be at that same location for over 24 months which in this case appears to be for the first 6 months of contracting there.

One thing a lot of people forget it that for a location to be temporary there has to be another location that is the permanent location, if there isn't then by default the first location is a permanent one and it is for this reason that employees can't claim for ordinary commuting.

HTH

Martin
Contratax Ltd

[Contreras]

If travel to the same location can become allowable when a formerly permanent location (which seems dubious to me) becomes a temporary location, then why should the trigger be change of employment rather than handing in notice? This is why it seems very suspect to me. I would think that once a location is permanent it cannot become temporary.

...or, if it can, then why not start the clock at the point the workplace becomes temporary.

I'm sure, with a little persistence, someone will eventually give the opinion I'm looking for.

[speling bee]

Hi Spelling Bee

Just to give my 2p's worth.

Joe's time at Bank #1 was a permanent location because he had no other location for work i.e. had had to work at the bank under that employment. Now that he's gone contracting his permanent location is his home office and Bank #2 becomes a temporary location so he can start claiming travel expenses up until the point he expects to be at that same location for over 24 months which in this case appears to be for the first 6 months of contracting there.

One thing a lot of people forget it that for a location to be temporary there has to be another location that is the permanent location, if there isn't then by default the first location is a permanent one and it is for this reason that employees can't claim for ordinary commuting.

HTH

Martin
Contratax Ltd

Thanks, Martin. But where does it say there must be a permanent location. That's news to me. E.g.

EIM32075 - Travel expenses: travel for necessary attendance: definitions: temporary workplace

EIM32075 - Travel expenses: travel for necessary attendance: definitions: temporary workplace
Section 339(3) ITEPA 2003
A workplace is a temporary workplace if an employee goes there only to perform a task of limited duration or for a temporary purpose. So even where an employee attends a workplace regularly, it will be a temporary workplace and so not a permanent workplace, if the employee attends for the purpose of performing a task of limited duration or other temporary purpose.

Limited duration is explained at EIM32080.

Temporary purpose is explained at EIM32150.

If a workplace is capable of being a temporary workplace by reference to this rule, you must consider the following additional rules:

the 24 month rule, see EIM32080
the fixed term appointment rule, see EIM32125
the depots and bases rule, see EIM32160
the area rule, see EIM32190
These rules can only apply if the workplace is capable of being a temporary workplace by reference to S339(3).