Expenses - bit dodgy this one but its not me

[The Spartan]

How can the journey be legitimate if you're only paying £20 on the train yet claiming £45 for the mileage? In these circumstances you should only claim for the cost of the train ticket

[oliverson]

FFS, and how many potential customers visit your living room? I'm sure it's more than enough to justify a 4k TV to say "Oliverson Co welcomes Mr Hector Taxman (HMRC)" Or does it just loop the Oliverson Co motivational video you made with the HD video camera you no doubt also claimed for.

Doesn't matter. I'm a developer, it's for R&D, I'm evaluating writing apps for smart tv's, playstations, etc. Finance is dying, I need to diversify, etc.

[psychocandy]

Got to agree with spartie here. Surely the legal thing is to claim what you actually use/spend.

The car hire example is interesting. Surely, if you hire a car you should claim for cost of car hire, plus actual cost of fuel you put in? But then what happens if you use the hire car for personal use?

Thinking about it - I've done it once. Car broke down and I had hire car for few days. So I just claimed 45pm without thinking as per normal. I guess the alternative would have been a bit complicated.

Bit dodgy of car hire place to point out this is how to do it though.

[JRCT]

How can the journey be legitimate if you're only paying £20 on the train yet claiming £45 for the mileage? In these circumstances you should only claim for the cost of the train ticket

The journey is legit. I still have to get from my home to my temporary place of work.

I don't think this is really a biggy and no-one can really get all moral about this when the whole idea of claiming for travel to a temporary work place is effectively a 'loophole' that we all exploit.

If anyone's really that bothered about kharma, then perhaps they shouldn't be claiming travel at all.

[oliverson]

The journey is legit. I still have to get from my home to my temporary place of work.

I don't think this is really a biggy and no-one can really get all moral about this when the whole idea of claiming for travel to a temporary work place is effectively a 'loophole' that we all exploit.

If anyone's really that bothered about kharma, then perhaps they shouldn't be claiming travel at all.

Eh? Loophole? Exploit? That's a perfectly valid business expense.

[ContrataxLtd]

I think this is fine, actually. I do it often, not because it saves me money, necessarily. It's just easier. I sometimes drive, I sometimes go on the train, I sometimes drive there and train back.

The 45p per mile allowance takes into account wear and tear - not just fuel - and I don't think it REALLY costs you 45p per mile, so it's not an exact science.

There's a car hire place near me that gives an example journey on their website.

ie. You can hire our car for a business meeting to travel from A to B. Fuel included. Total cost is £X per day.

As you can claim 45p per mile on your expenses, you will save £Y per day.

I don't think ANYONE would use their services and only claim £X (the cost). You would claim the 45p per mile.

The journey is legit. It's not the same as going the long way round or buying a £4k tv or taking your wife to a hotel for a 'business meeting'.

I think you are comparing two different situations here.

1) Claiming mileage allowance when you haven't used a personal car for the journey but instead took the train.

2) Hiring a car in your example and that costs say £50 for the day, doing a 200 mile business journey in it and claiming 200 * 45p = £90 back from your co/employer if permie.

The first IMHO is out and out fraud, you are claiming for something that you haven't done, you haven't used your personal car for the journey so can't claim the mileage allowance. In the second example, the hire car effectively is your personal car for the day (assuming you hire it personally) so you are perfectly within the rules the claim the mileage allowance.

If you were a permie working for XYZ plc would they be happy with you claiming for a mileage allowance when you actually took the train thus costing them more in expenses?

Martin
Contratax Ltd

[Pondlife]

Doesn't matter. I'm a developer, it's for R&D, I'm evaluating writing apps for smart tv's, playstations, etc. Finance is dying, I need to diversify, etc.

I'm not the one you'd need to convince. IF you were ever investigated you'd have to convince the taxman that the TV/playstation in your living room, assuming that's where it is and not in a lab rigged up top a load of test kit, is wholly and exclusively used for business. If it were me I would laugh in your face and then proceed to demand receipts and a justification for every expense for the past six years.

How many playstation apps have you written, just out of interest?

[psychocandy]

Hi Psychocandy

So the long and short of it is that your friend is committing tax fraud!

Regardless of whether he will get caught or not and the rational behind justifying it it's still fraud at the end of the day so it's a stupid idea. Why not just go the whole hog and come up with a different longer route so more miles can be claimed fraudulently because all your friend is actually saving is about £600 in tax over a year (he soon hits 10,000 miles then it's only a fiver a day 'saving') which hardly seems worth risking big penalties/interest for.

I'll sit back and wait for NLUK to see this thread now

Martin
Contratax Ltd

Good point. Its only 45p up to 10000 and 100 miles day will soon eat that up.

£50 a month = not worth the risk. Dont think hes twigged this yet - I think hes only been doing it a few months so not at 10000 miles yet.

Totally agree with everything said here but I still fear theres no way in a million years HMRC are going to be able to pin anything on him even if he gets investgated. For instance,

HMRC: OK. You claimed 100 miles per day from this date to this date travelling from home to client. Prove it.
Contractor: OK, heres the contract, showing office address, you know my address, you have the dates. Heres my signed timesheet showing I attended on these days. So there we are - 100 mile according to google maps.
HMRC: Ummm. OK. Prove you used your car then and didnt just catch the train etc etc etc.
Contractor: Prove I didnt drive.

Impossible to prove. AFAIK there is no requirement to give HMRC mileage on your car, proof using fuel receipts etc. Ultimately (althoiugh I bet they cant do this) they could ask you to show credit card etc to show fuel but that proves nothing -occasionally you use cash.

But then I guess mileage its so easy to fiddle mileage.....

I worked for client once and deal was I would go to their customer site once every two weeks - it was in contract. Also, it was an inclusive rate (no expenses paid for this). Ended up only going 3/4 times in 2 years (I didnt complain - it was 100 miles away). I only claimed what I did but who would have known if I'd claimed for a trip every two weeks - it was in the contract after all and HMRC would never know which office I was in ever.

[psychocandy]

I think you are comparing two different situations here.

1) Claiming mileage allowance when you haven't used a personal car for the journey but instead took the train.

2) Hiring a car in your example and that costs say £50 for the day, doing a 200 mile business journey in it and claiming 200 * 45p = £90 back from your co/employer if permie.

The first IMHO is out and out fraud, you are claiming for something that you haven't done, you haven't used your personal car for the journey so can't claim the mileage allowance. In the second example, the hire car effectively is your personal car for the day (assuming you hire it personally) so you are perfectly within the rules the claim the mileage allowance.

If you were a permie working for XYZ plc would they be happy with you claiming for a mileage allowance when you actually took the train thus costing them more in expenses?

Martin
Contratax Ltd

Not sure if many permie employers would be that bothered if you claimed mileage but instead took the bus.

Also, same thing, potentially how would they know?

[Pondlife]

HMRC: Ummm. OK. Prove you used your car then and didnt just catch the train etc etc etc.
Contractor: Prove I didnt drive.

Impossible to prove.

The onus is on you to prove the expense WAS occurred, not for the tax man to prove it didn't.

Your whole outlook on this seems IMHO to be, How much can I lie before getting caught.

You know it's dodgy or you wouldn't have created the thread... again, just my opinion.