Reply to: Accountant says I can't claim travel expenses

[pr1]

I guess I'm old fashioned but I thought it might be better to see my accountant in person. I was a bit concerned that an online one would be some call centre with a different person handling my call each time.

But I've had a look at InTouch and it looks good. So I might give them a go.

That's a fair concern and there are some accountants where you end up with a new person every time you call - make sure you join one where you have a designated accountant to avoid that problem

[SueEllen]

I guess I'm old fashioned but I thought it might be better to see my accountant in person. I was a bit concerned that an online one would be some call centre with a different person handling my call each time.

But I've had a look at InTouch and it looks good. So I might give them a go.

Where I live I've overheard people who are clearly accountants talking to their clients' in the street and at train stations. (I'm not sure why they didn't say they can't talk then like a lot of other business people do when they can be overheard by random people.)

Due to smartphones you will find workaholic accountants, solicitors etc who run their own businesses will answer you at random hours. I actually didn't expect my own accountant to answer an email I sent at 5.30pm until the next day. He answered it at 7.30pm that day.....

[northernladuk]

I guess I'm old fashioned but I thought it might be better to see my accountant in person. I was a bit concerned that an online one would be some call centre with a different person handling my call each time.

But I've had a look at InTouch and it looks good. So I might give them a go.

Tell them Mudskipper sent you....

[paragon]

I guess I'm old fashioned but I thought it might be better to see my accountant in person. I was a bit concerned that an online one would be some call centre with a different person handling my call each time.

But I've had a look at InTouch and it looks good. So I might give them a go.

[Alan @ BroomeAffinity]

Most of the accountants on here will have clients the length and breadth of the country, and potentially beyond. Location should be no barrier. Of our 400-odd clients I'd say we have had less than 20 in our office.

[SlipTheJab]

Thanks for the quick replies. I am shopping for a new accountant now. This is the problem with living in a rural small town and the only businesses are hairdressers and shops. The accountants aren't used to software contractors.

To answer some questions, my contract states:
"This Agreement shall commence on the Commencement Date and shall continue, subject to the provisions of this Agreement, for 3 months unless terminated earlier by either party giving to the other not less than 2 weeks’ written notice to terminate this Agreement."

And

"The Consultant shall be expected to provide services to the Client for a maximum total of 65 days during this Agreement"

So I would say that is a fixed term contract.

I looked up the definition of a temporary workplace. I've never been to the town where the client is based before, and probably never will again after this contract. And I spend less than 40% of my time at the client's premises so I'd say it is a temporary workplace.

I will definitely get my next contract reviewed before I start it.

No need to rock up at your local high street accountant whose used to dealing with Greengrocers and Newsagents, mines an IT contractor specialist, never met him, never had to, does a first rate job via email and phone.

[mudskipper]

Hi, I'm a software developer contractor. I only recently started contracting and my first gig is a 3 month fixed term project. I've been trying to understand all the legalities and rules but I'm getting conflicting advice. I hired an accountant but I don't think she specialises in IT contractors and she's giving me conflicting advice to what I read on the CUK website. I am director of a limited company and I'm the only employee.

My contract with the client is very careful to not imply that I am an employee. I don't have a desk or office I have to be at, I work what ever hours I want, as long as I get the work done. I'm there to deliver a specific project and it's a fixed term/price contract. I charge by the day.

I drive to the client's premises mostly every Mon, Wed, Fri for a few hours to chat about the progress of the project and demo my work. I go home after lunch and continue to work from home. On Tues and Thurs I work from home. It's important to point out that I chose these days to see the client because it suits my schedule. The client did not ask me to come in on any particular days. I have worked bank holidays from home when the permanent staff were off. I've worked at weekends because it suited me. Occasionally I don't go in on a Monday (or Wed or Fri) if I need to do something else at home. I inform the client when I do that but I don't need their permission.

My accountant is saying that because I go to the client's offices on a regular basis, I could be seen as an employee of the client, and therefore I cannot claim my car travel expenses at 45p per mile. She said that if I went on on irregular days, e.g. Mon this week, and Thurs next week, and Tues the week after that, then I wouldn't be seen as an employee. Is she just covering her arse?

My understanding is that going to a client's premises can be unavoidable if you work in software development, especially if working with sensitive data or you have to work on the client's systems, and doesn't automatically make you an employee. And even if I fall into IR35 I can still claim travel expenses according to the CUK website. Although, I rang someone at SJD Accountancy and she said that from April 2016 contractors who fall into IR35 cannot claim travel expenses. Is that true?

After this contract finishes I might have another lined up in London. It would be a long term contract, possibly 6 months rolling, to work on various large projects. I would need to get the train into London at £60 a day. I've agreed with this potential client that I can go in to their offices 2 days week to have a catch up, The other 3 days I'm going to London for training (not related to the client). So now I'm worried that I can't claim any of my train tickets as expenses. It's a lot of money! My accountant says that because the contract could go on for 2 years, I definitely would be classed as an employee. She seems to think that whether or not I fall into IR35 is all about how often I go to the client's premises and how long the contract is for.

To summarise:
My current contract - can I claim my mileage expenses?
My next contract - can I claim my train costs?


Thanks in advance,
a very frustrated developer

1) Get a specialist contractor accountant - I also use InTouch and am very happy with them, but others recommendations are good too.
2) It's not a 'fixed term contract', it's a 3 month contract. As others have said, a FTC is a very different beast (to be avoided, unless desperate!)
3) From the limited info given, it sounds like you should have a good case for being outside IR35. This matters now, although not in relation to T&S. From April it will matter for T&S too. It matters now, because it affects how you can withdraw money from your company, and how much tax you pay. (Read the guides -->)
4) From April, if you're inside IR35, you cannot claim T&S to the main base of the contract.
5) At the point you know you're going to be in one location, more than 40% of the time, you can no longer claim T&S. This is independent of client, and is based on location.

Assuming you believe you're outside IR35, take out tax investigation protection, and get on with running your business.

[SueEllen]

You don't need a local accountant. I've had two from the big names and haven't needed to meet either of them in 8 years. Seems odd you work remotely providing services yet haven't considered accountants can do the same. Get one of the recommend it big names in contractor specialist accounting and don't worry about where they are based. IMO get one that offers freeagent as part of the package.

To highlight it again you do not need a local accountant.

All the accountants and solicitors I've used have been in different parts of the country to me.

As long as the accountant can use email and answer queries promptly then there is no need for them to be down the road.

I've only known one contractor in 10 years who ever needed to pick up something in person from their accountant, and that was only because the accountant refused to post it to them. Funnily enough their accountant was down the road from me and I offered to pick it up for him. When he told the accountant that the item was posted to him....

[fool]

I use Maslins. I'd recommend him though I'm sure the other recommedations are good too. They provide freeagent, I probably wouldn't go with an accountant that doesn't have a non-firm owned system.

[jmo21]

In this area, a fixed term contract implies that it's a fixed term employment contract - which is the worst of both worlds. You get the permie work and pay, and little rights to go with it, knowing that at the end of the contract you're out.

Yep, and just to make it even clearer for the OP - it's PAYE. You would be on the employers payroll.

They wouldn't be your client, you wouldn't be doing it through your own Ltd.

[northernladuk]

You don't need a local accountant. I've had two from the big names and haven't needed to meet either of them in 8 years. Seems odd you work remotely providing services yet haven't considered accountants can do the same. Get one of the recommend it big names in contractor specialist accounting and don't worry about where they are based. IMO get one that offers freeagent as part of the package.

[TheFaQQer]

So I would say that is a fixed term contract.

In this area, a fixed term contract implies that it's a fixed term employment contract - which is the worst of both worlds. You get the permie work and pay, and little rights to go with it, knowing that at the end of the contract you're out.

So - it's a three month contract, working in a temporary location, with every intention to continue working in this way for other clients. You can claim travel and subsistence expenses now.

If you're inside IR35, then you should stop claiming them from the start of the new tax year in April. If you're outside IR35, then you can continue until you hit the two year rule.

You don't need a local accountant - you need someone who can help you get started properly, give you the advice that you need, is there on the phone / email when you need them, and is reliable. That's why I use InTouch - I had a local accountant, who was incredibly expensive and ended up in a bit of a mess. In the same way that our clients pick the best resources they can find, regardless of their base office, I'd do the same with an accountant - I've never met mine, but I know how pleased I am with them.

[paragon]

Thanks for the quick replies. I am shopping for a new accountant now. This is the problem with living in a rural small town and the only businesses are hairdressers and shops. The accountants aren't used to software contractors.

To answer some questions, my contract states:
"This Agreement shall commence on the Commencement Date and shall continue, subject to the provisions of this Agreement, for 3 months unless terminated earlier by either party giving to the other not less than 2 weeks’ written notice to terminate this Agreement."

And

"The Consultant shall be expected to provide services to the Client for a maximum total of 65 days during this Agreement"

So I would say that is a fixed term contract.

I looked up the definition of a temporary workplace. I've never been to the town where the client is based before, and probably never will again after this contract. And I spend less than 40% of my time at the client's premises so I'd say it is a temporary workplace.

I will definitely get my next contract reviewed before I start it.

[Louisa@InTouch]

I use InTouch and recommend them (if you speak to Louisa, mention my forum name).

Do you want a job? As you said it all.

You need to consider 40%/24 month rule when looking at if you can claim for travel and subsistence currently.
Post April 2016, you will need to consider your IR35 status - if you are outside of IR35 then no changes will apply.

Don't forget the rule is based on location, rather than the actual end client itself.

And as for IR35, I would suggest that you look at getting a contract review done and a professional to talk through your working conditions.

[BrilloPad]

Switch to QDOS or any other accountant.

Remember that accountants are not your friend. They are agents of HMRC.