Claiming expenses

[Tensai]

Welcome to Friday everyone.

Quick questions re claiming expenses, I've worked at the same client site (big oil company) for three years, but at two different parts of the organisation and for different agents each time. About to start the third gig, same story.

Do I need to stop claiming if they're different agencies but at the same site and for different sub-companies?

Greedy of SW London

[Sockpuppet]

No. Its based on location (not physical building but area)

[dude69]

Welcome to Friday everyone.

Quick questions re claiming expenses, I've worked at the same client site (big oil company) for three years, but at two different parts of the organisation and for different agents each time. About to start the third gig, same story.

Do I need to stop claiming if they're different agencies but at the same site and for different sub-companies?

Greedy of SW London

assume your talking about commuting expenses under temporary workplace rule.

You should have stopped claiming as soon as the engagement began that would during its course take you over two years on substantially the same journey.

In other words, say you live in Guildford, you sign a contract for 12 months in Liverpool Street - travel expenses allowable; you then sign another one for 18 months in Blackfriars. This is substantially the same journey and you would have stop claiming.

If the second contract h ad only been for 9 months it would have been ok.

Employer and site is irrelevant, it's about the journey.
Here are some examples from HMRC:



Example 1

Cameron is a production manager. He normally drives to a permanent workplace 18 miles from his home. One day he has to visit a client to discuss in detail the specifications for a new product. The client's office is 3 miles along Cameron's ordinary commuting route. After Cameron has seen the client he drives the remaining 15 miles along his ordinary commuting route to his permanent workplace. While the journey to the client is on the same route as Cameron's ordinary commuting journey it is a much shorter journey. It is not therefore substantially ordinary commuting so Cameron is entitled to relief for the cost of his journey from home to the client's office.

Example 2

Nahid is employed as a housing officer. She normally drives to a permanent workplace 4 1/2 miles from her home. One day she has to visit a client who lives 3 miles along her ordinary commuting route. After Nahid has seen the client she drives the remaining 1 1/2 miles along her ordinary commuting route to her permanent workplace. The journey to the client is along the same route as Nahid's ordinary commuting journey and is substantially the same length. It is therefore substantially ordinary commuting so Nahid is not entitled to relief for the cost of her journey from home to the client.


Where the journey to the temporary workplace is longer than the ordinary commuting journey it is still important to consider all aspects of both the ordinary commuting journey and the journey to the temporary workplace.


Example 3

Richard is a teacher. He normally travels the 15 miles to his school by moped. One day he has to visit a parent of one of his pupils to discuss the child's end of term report. The parent lives 1 1/2 miles beyond the school. To save time Richard decides to take the car and drives along his ordinary commuting route, past the school and on to the parent's home. After his discussion with the parent he then drives the 1 1/2 miles back to the school. The journey from home to the parent is along the same route as Richard's ordinary commuting journey and is substantially the same length. The journey to the parent's home is therefore substantially ordinary commuting and Richard is not entitled to relief. The fact that he uses a different form of transport from normal does not affect the position; Richard's journey is still substantially ordinary commuting.

Example 4

Alisha is employed as a human resources manager. She normally drives 9 miles to her office which is a permanent workplace. One day she has to visit a factory to discuss possible redundancies. The factory is 11 miles beyond her office. Alisha drives the 20 miles to the factory. Her journey takes her along her ordinary commuting route and past her permanent workplace. The journey from home to the factory is substantially longer than Alisha's ordinary commuting journey so, even though she covers the same route for part of her journey, it is not substantially ordinary commuting. Alisha is therefore entitled to relief for the full cost of her journey.


Example 4 falls within the commitment the Inland Revenue has given that it will not normally seek to argue that a journey to or from a temporary workplace is substantially ordinary commuting where the extra distance involved is 10 miles or more each way.

A journey to a temporary workplace which takes the employee in a completely different direction from the ordinary commuting journey is not substantially ordinary commuting even if the distance travelled is the same. However, a journey that is made in what is to all intents and purposes the same direction and is substantially the same length as the ordinary commuting journey is substantially ordinary commuting even if the employee takes a different route.


Example 5

Bill is employed as a customer support manager for a computer company. He normally drives the 9 miles to his permanent workplace. One day he has to visit a client to sort out some problems with a computer. The client's premises are only 1/2 mile from Bill's permanent workplace. He drives direct to the client from home. His journey to the client is the same length as his ordinary commuting journey but he does not drive along the same route because there is a more direct alternative. Bill's journey to the client is the same length as his ordinary commuting journey and is in almost exactly the same direction. It is therefore substantially ordinary commuting even though he does not follow exactly the same route. Bill is not therefore entitled to relief for the cost of his travel.

Example 6

Jessica is employed as a clerk in an insurance company. She works flexi time. She normally drives to her office which is a permanent workplace. The route she takes depends on what time she leaves the house. If she leaves before 8am she drives 8 miles along the A road but if she leaves later she drives 10 miles along the B road and drops her daughter off at school on the way. Jessica has an early morning meeting with clients at their offices which are 9 miles along the B road from Jessica's home. The early start means that Jessica cannot take her daughter to school. Jessica's journey from home to the clients is along the same route as her ordinary commuting journey and is substantially the same length. It is therefore substantially ordinary commuting and she is not entitled to relief for the cost of her travel. The fact that she has more than one ordinary commuting route and would normally have taken the A road at that time of day does not change the fact that her journey to the clients' offices is substantially ordinary commuting.

Example 7

Tony is employed as a senior executive in a publishing company. He normally drives 5 miles north to his office which is a permanent workplace. One day he has to visit a client to discuss proposals for a new magazine. The client's office is 5 miles south of Tony's home. He drives there direct from home. After the meeting he drives 10 miles to his permanent workplace. The journey from home to the client is exactly the same length as Tony's ordinary commuting journey but it is in a completely different direction. The journey to the client is not therefore substantially ordinary commuting and Tony is entitled to relief for the full cost of his travel.


Remember that there is no relief for a journey which is ordinary commuting or substantially ordinary commuting even if that journey is made outside an employee's normal working hours.


Example 8

Elaine is employed as an accountant. She normally works Monday - Friday and drives the 20 miles to her office which is a permanent workplace. She needs to see a client who lives only 1/2 mile away from Elaine's office. The client can only find time to discuss his accounts at the weekend so one Saturday Elaine drives to the client's home travelling 19 1/2 miles along her ordinary commuting route. After she has seen the client Elaine goes on to her office where she spends the rest of the day catching up with some paperwork. The journey to the client's home is substantially the same length as Elaine's ordinary commuting journey and takes her along the same route. It is therefore substantially ordinary commuting and she is not entitled to relief.



"In practice you should recognise the change of workplace in all cases except where the change has made no significant difference to the commuting journey. "

Here's an example which will be bad for anyone in London


"An employee works for an employer who has several offices close to each other in London. Her employer rotates staff around the offices every 18 months. She works at one office and is then moved to another. She travels to work on the Underground and, although she now gets off ten stops further on than previously, her journey is largely unaltered and the price of her ticket does not change."


An extra twenty-thirty minutes each way, but same cost, and they say same journey.

In other words, anyone who works pretty much anywhere in London and commutes from out of it, would have the same journey.

[Tensai]

If the second contract h ad only been for 9 months it would have been ok.

Each contract has been for 6 months (apart from one 12 month)....?

For the sake of £100/month, think I might stop claiming the "business mileage" to keep Hector happy. At least it's not IR35...

[Bluebird]

Each contract has been for 6 months (apart from one 12 month)....?

For the sake of £100/month, think I might stop claiming the "business mileage" to keep Hector happy. At least it's not IR35...

are the contracts on the same site ?

[Tensai]

are the contracts on the same site ?

Mostly on the same big campus, different buildings. but to complicate matters, the middle 12 months was at a site in Leatherhead.

My head hurts. Might bung off a mail to my friendly neighbourhood accountant and let him work it out....

[NotAllThere]

All these example relate to very temporary changes to a temporary work place. Not really related to the two year rule.

And when did these rules come in anyway? What happened to the "lesser of" rule? Where you were entitled to claim the mileage for the journey which was the smallest of the actual mileage, and the mileage from the office to the temporary work place?

[NotAllThere]

Mostly on the same big campus, different buildings. but to complicate matters, the middle 12 months was at a site in Leatherhead.

My head hurts. Might bung off a mail to my friendly neighbourhood accountant and let him work it out....

Good idea. You need to take into account the amount of time spent at different sites as well.

[dude69]

All these example relate to very temporary changes to a temporary work place. Not really related to the two year rule.

And when did these rules come in anyway?

1998 ? Something like that. Something up on t he HMRC about the old rules being confusing and unfair to apply.

The examples are of whether something is the same workplace or not. They ARE related to the two-year-rule, because the two-year-rule is simply the maximum possible extension temporally of a "very temporary changes to a temporary work place". You have it the wrong way round, you are thinking 'I can claim for two years max in the same place'. Actually that is wrong, and you need to think of it as you normally working in one place (your registered offices) and you are temporarily changing it for a period of time, be it 1 day or six months. If that changes permanently, then it the place of your contract becomes your permanent place of work, and is no longer temporary.

The two-year-rule applies, as does the question of whether the journey has changed or not.

What happened to the "lesser of" rule? Where you were entitled to claim the mileage for the journey which was the smallest of the actual mileage, and the mileage from the office to the temporary work place?

Scrapped.

[NotAllThere]

Now my head hurts! ( And I feel old - 1998! )

Once again, I'm glad I live in a country where the tax rules make some kind of sense. And home to office travel is allowable even for permies.