My life as a contractor- Day 2

[kempc23]

It isn't a different journey, you still travel from A to B, it is a different method of journey. It is about your place of work, not the actual journey IMO. If this was the case we would be swapping from a bike to a car every 2 years to restart the clock. Remember most if not all of the policies are generic and do not factor in highly personal circumstances unfortuantely.

Fair enough, maybe im mixing things up here.

In my example it is a different journey, as in both cases, B is a completely different place!

The point I was trying to make with the bike thing was that my accountant said that the difference in cost of travel was also relevant.

[kempc23]

Thanks Northernladuk. Found the answer I was looking for in there-

This doesn't really work for freelancers, who frequently have a temporary workplace away from home. Sadly the rules do not make any allowance for that, after 24 months travel and subsistence costs for working away from home at a temporary workplace are no longer able to be offset against tax and become a Benefit-in-Kind.

However, that leaves a few areas unclear - what is your place of work, what is your temporary place of work and even what is 24 months? No wonder people are confused.

Leaving aside Umbrella Company users, whose status is even more unclear and is under review, a freelancer's place of work is assumed to be their home address or their registered office. This means that you can claim the costs of travel from there to wherever it is you are working at present as a legitimate business expense, which is something a permanent employee cannot do (and hence the problem with Umbrella Companies). So far, so good.

However, your temporary workplace is not simply the location of your current client. To the taxman, if the journey you take to get there is substantially the same, then it is the same location regardless of which final address you end up at. So if your current and previous clients were both based in Canary Wharf, then you haven't changed your temporary workplace. This doesn't really work for freelancers, who frequently have a temporary workplace away from home. Sadly the rules do not make any allowance for that, after 24 months travel and subsistence costs for working away from home at a temporary workplace are no longer able to be offset against tax and become a Benefit-in-Kind.

However, that leaves a few areas unclear - what is your place of work, what is your temporary place of work and even what is 24 months? No wonder people are confused.

Leaving aside Umbrella Company users, whose status is even more unclear and is under review, a freelancer's place of work is assumed to be their home address or their registered office. This means that you can claim the costs of travel from there to wherever it is you are working at present as a legitimate business expense, which is something a permanent employee cannot do (and hence the problem with Umbrella Companies). So far, so good.

However, your temporary workplace is not simply the location of your current client. To the taxman, if the journey you take to get there is substantially the same, then it is the same location regardless of which final address you end up at. So if your current and previous clients were both based in Canary Wharf, then you haven't changed your temporary workplace. If one was in Canary Wharf and the other in the City of London, then you have.

[northernladuk]

Fair enough, maybe im mixing things up here.

In my example it is a different journey, as in both cases, B is a completely different place!

The point I was trying to make with the bike thing was that my accountant said that the difference in cost of travel was also relevant.

Yeah I understand that. Key here is the 'also' not individually. To be fair it is hard enought trying to understand this when were dealing with comparing apples but to throw a pear in as well makes it totally unanswerable I think. I just like playing pedant and offering up different points of view for intersting discussion not to dictate. I am caught by my own north south example so do wish there was a clearer directive myself.

[northernladuk]

However, your temporary workplace is not simply the location of your current client. To the taxman, if the journey you take to get there is substantially the same, then it is the same location regardless of which final address you end up at. So if your current and previous clients were both based in Canary Wharf, then you haven't changed your temporary workplace. If one was in Canary Wharf and the other in the City of London, then you have.

Thats a good write up. Where is that from? That is what I always assume the permie idea as I know it falls over when we get involved. I like the last statement but who said it? I am tempted to ask the author what if the new role in London is closer to home than the Canary Wharf. I don't think anyone has actually asked about the 2 year rule in a situation where the journey was significantly shorter. Does it even matter as long as it meets the significantly rule, I guess it shouldn't but would the HMRC be happy restarting the clock when it is actually cheaper and easier? My brain hurts now.

[kempc23]

It was from the first link in that page of links you put together mate.

<snip>

[northernladuk]

It was from the first link in that page of links you put together mate.

<snip>.

Doh!!! LOL...

Your link doesn't work but yes I see it.

<snip>

[TheFaQQer]

So if your current and previous clients were both based in Canary Wharf, then you haven't changed your temporary workplace. If one was in Canary Wharf and the other in the City of London, then you have.

I disagree - it also depends on where you are starting from.

If you are starting from Canary Wharf, then you can argue that the journey has changed if you now need to go to the West End.

If you are starting from Glasgow, then I think you'd have a job to argue that the journey has significantly changed.

As I said earlier - see what Bob Jones has to say on Contractor Alliance. Or see what he has said in these fora as well.

[kempc23]

I disagree - it also depends on where you are starting from.

If you are starting from Canary Wharf, then you can argue that the journey has changed if you now need to go to the West End.

If you are starting from Glasgow, then I think you'd have a job to argue that the journey has significantly changed.

As I said earlier - see what Bob Jones has to say on Contractor Alliance. Or see what he has said in these fora as well.

Is it worth signing up to Contractor Alliance?

[robin]

So if it is a constant rolling 24 months and you look at it at the current point in time therefore on my understanding.....

If I had a 18 month contract in Oxford then worked elsewhere not in Oxford for the next 2 years and a month before then I get another job in Oxford for 8 months.

Given I previously worked in Oxford for 18 months and with this 8 months it would effectively take me over the 24 month rule but as the 18 month job was over 24 months ago then the 24 month rule is reset for this 8 month job in Oxford and I can claim expenses for it.

Also I can claim expenses for any other job I get in Oxford after that one up to 24 months which lies within any 24 month period!?

[TheFaQQer]

Is it worth signing up to Contractor Alliance?

It's free - or it used to be.

I only signed up for Bob's expert advice on tax.