Moving from umbrella to ltd on renewal

[speling bee]

Well this goes totally against everything we normally advise and against the example HMRC give in London where the employee changes to another company just down the road. 24 months is all about location. Will read the link later though.

The 24 months is about location, journey and cost of journey. But the 10,000 miles is about employment. Simple enough for you?

[Contreras]

Further to my earlier post, as I wasn't sure before but the 24 month rule will still kick in regardless if whether you change employer from a brolly to YourCo as it's a personal tax relief that applies directly to you (you have to claim the allowances on your tax return).

What if, say:

• Joe works as permanent employee at bank #1.
• After 10 years Joe quits job at bank #1.
• Joe gets 6 month contract with bank #2 next door.

For how long can Joe claim travel expenses during the 6 month contract?

Me thinks it's all or nothing, and the same could be applied to going brolly->ltd.

[speling bee]

What if, say:

• Joe works as permanent employee at bank #1.
• After 10 years Joe quits job at bank #1.
• Joe gets 6 month contract with bank #2 next door.

For how long can Joe claim travel expenses during the 6 month contract?

Me thinks it's all or nothing, and the same could be applied to going brolly->ltd.

Same journey. No claim (free of BIK).

[TheCyclingProgrammer]

Although I think (someone could perhaps kindly confirm) that the 10,000 miles (for which you can claim 45p per mile before the 25p per mile rate kicks in) resets when you change employer.

Even if it did, that would still be separate to the 24 month rule I think so you still wouldn't be able to claim any mileage for that contract if caught by the 24 month rule. The limit may reset for other qualifying business travel though.

[speling bee]

Even if it did, that would still be separate to the 24 month rule I think so you still wouldn't be able to claim any mileage for that contract if caught by the 24 month rule. The limit may reset for other qualifying business travel though.

Of course.

Q1 Is travel allowable as expense? (24 month rule, resets when location / journey substantially changes but not simply because employer changes)
If Yes:
Q2 What rate is mileage? (45p for 1st 10,000 miles, but this resets when employer changes even if location is the same)

[TheCyclingProgrammer]

Of course.

Q1 Is travel allowable as expense? (24 month rule, resets when location / journey substantially changes but not simply because employer changes)
If Yes:
Q2 What rate is mileage? (45p for 1st 10,000 miles, but this resets when employer changes even if location is the same)

Right, it wasn't clear as I thought you were implying that OP could continue claiming mileage after changing employer even if they were caught by the 24 month rule (and I think NLUK may have also thought you were implying this). If you weren't, then fair enough!

[TheCyclingProgrammer]

What if, say:

• Joe works as permanent employee at bank #1.
• After 10 years Joe quits job at bank #1.
• Joe gets 6 month contract with bank #2 next door.

For how long can Joe claim travel expenses during the 6 month contract?

Me thinks it's all or nothing, and the same could be applied to going brolly->ltd.

I would say that Bank #2 would continue to be treated as a permanent place of work as there has been no significant location change and wouldn't be able to claim any travel expenses. The change of employer is irrelevant and so is the fact that they were previously a permie and are now a contractor.

However I'm not 100% certain; it just seems like the obvious conclusion when you consider the intent of the 24 month rule and why it works the way it does.

[Contreras]

Same journey. No claim (free of BIK).

Alright, now instead of 10 years permanent employment at bank #1, try 22 months permanent employment at bank #1.

Joe is considered to have already relocated for his job at bank #1. That's why he couldn't claim BIK free expenses at bank #1. Are we saying nonetheless that he can claim expenses with his new contract at bank #2 next door, BIK free, for 2 months only?

[speling bee]

Alright, now instead of 10 years permanent employment at bank #1, try 22 months permanent employment at bank #1.

Joe is considered to have already relocated for his job at bank #1. That's why he couldn't claim BIK free expenses at bank #1. Are we saying nonetheless that he can claim expenses with his new contract at bank #2 next door, BIK free, for 2 months only?

No. He can't claim them at all (BIK free).

[Craig at Nixon Williams]

Although I think (someone could perhaps kindly confirm) that the 10,000 miles (for which you can claim 45p per mile before the 25p per mile rate kicks in) resets when you change employer.

The 10,000 mile rate does reset each employment, see link to HMRC: Employees using own vehicles for work: more than one employment: associated employments.

However (as in the link) if the employments are associated with each other, the 10,000 can only be claimed once. HMRC use an example of companies in the same group in their example but I’d suggest that if you are travelling to the same location to do the same role then I'd think they could try to argue that the two employments would be associated in that circumstance too.

What if, say:

• Joe works as permanent employee at bank #1.
• After 10 years Joe quits job at bank #1.
• Joe gets 6 month contract with bank #2 next door.

For how long can Joe claim travel expenses during the 6 month contract?

Me thinks it's all or nothing, and the same could be applied to going brolly->ltd.

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.

Craig