Reply to: Question about expenses

[FK1]

Ermm...

Strictly speaking she's not wrong. If you only have the one engagement since starting then that is your permanent workplace. It's only when you have more than one, or a reasonable expectation of getting more than one in a different location, that your home office kicks in as being your permanent workplace. And if you do get a second gig, then you can back claim your original contract T&S taxes.

Of course, most people make the assumption that they will continue elsewhere, but that is not a given.

Interesting nuance. So if he would back to permanent without having the second gig then that is in a affect one-off assignment and therefore...

The fixed term appointment rule can potentially prevent a contractor from claiming any expenses or tax relief at all. This is designed to prevent the client’s location for one-off assignments from qualifying as temporary workplace.

This rule might apply when, for example, an employee has left one job and is not starting the new one for three months and decides to contract for three months in between.

HMRC says that the client’s site cannot be a temporary workplace if the contractor is working on a contract “that can be expected to last for all, or almost all, of the period for which he or she is likely to hold, or continue to hold, that employment”.

Whether they are working via an umbrella company or limited company, the contractor will only be employed by that company for the duration of the contract, after which they start their new permanent job with their next employer. That means the client’s site cannot qualify as a temporary workplace and they cannot claim expenses and tax reliefs.

Travel expenses: travel for necessary attendance: fixed term appointments and agency workers: fixed term appointments
EIM32125 - Employment Income Manual - HMRC internal manual - GOV.UK

[Sam B Dynamo Accounts]

Looking to change

Hi Jackthedog

I'm not going to cover off the travel issue as I'm sure this has now been answered, it is allowable given the nature of your current contract as stated.

The advice I want to give is about changing accountants, yes I have an interest because we are accountants but that's not why I'm commenting! Take your time when changing providers, the relationship with your accountant is a personal one, especially with contractor accountants as it is largely by phone/email and just because someone you know gets on famously with their accountant doesn't mean you will. There's a great sticky on here with names of contractor accountant firms who all have slightly different offerings and there's a list under the first-timers section on the web-site too - I would suggest you read a few posts on here, make a short list and call the ones you think you might like to work with - we're all happy to have a chat and answer your questions, then this way you get a feel for who you can work with and hopefully move forward without issue.

Sam

[MrButton]

I'm with intouch accounting. They are pretty good so far for the past year and on time with all the stuff that needs doing.

Yes it should be claimable as you are outside of ir35 and it's only for 6 months so the 24 months rule is not applicable and on the portal it's set as an expense on your directors account that is owed back to you.

My accountant is Daniel and he is pretty good. Free ir35 assessment takes a day or two for review and they have tax / housing specialist
https://portal.intouchaccounting.com/portal/r/b/YQJK

Same and very happy with them so far. However you should also consider using an IR35 specialist in addition. That said - all the advice I've received so far from Intouch has matched that I've received from QDOS.

[cosmic]

I'm with intouch accounting. They are pretty good so far for the past year and on time with all the stuff that needs doing.

Yes it should be claimable as you are outside of ir35 and it's only for 6 months so the 24 months rule is not applicable and on the portal it's set as an expense on your directors account that is owed back to you.

My accountant is Daniel and he is pretty good. Free ir35 assessment takes a day or two for review and they have tax / housing specialist
https://portal.intouchaccounting.com/portal/r/b/YQJK

[WTFH]

I've merged the two threads so that it makes sense to anyone reading.

There's links on the right to contractor accountants, and you may get recommendations from individuals on here as well.

[malvolio]

Sorry I didn’t think my update was clear and I didn’t feel was answered. You haven’t blown my mind...And I’m grateful thank you.
She’s not getting it at all. I stated my perm work location was my home and trading address but she claims my engagement is in one location, even though away from home so I’m not entitled to relief. Throwing all kinds of jargon. Time to fire her.
Thank you again

Ermm...

Strictly speaking she's not wrong. If you only have the one engagement since starting then that is your permanent workplace. It's only when you have more than one, or a reasonable expectation of getting more than one in a different location, that your home office kicks in as being your permanent workplace. And if you do get a second gig, then you can back claim your original contract T&S taxes.

Of course, most people make the assumption that they will continue elsewhere, but that is not a given.

[Jackthedog]

Thank you northernlad

Why have you posted this again when it's been answered in your other thread?

Your permanent base is home and you travel to your client which is a temporary workplace. It's business travel. Maybe the home office is the bit she's missing. Anyway your other thread answers your question.

Also, and I hope I'm not going to blow your mind here, but you aren't an employee of your LTD.

Sorry I didn’t think my update was clear and I didn’t feel was answered. You haven’t blown my mind...And I’m grateful thank you.
She’s not getting it at all. I stated my perm work location was my home and trading address but she claims my engagement is in one location, even though away from home so I’m not entitled to relief. Throwing all kinds of jargon. Time to fire her.
Thank you again

[northernladuk]

Why have you posted this again when it's been answered in your other thread?

Your permanent base is home and you travel to your client which is a temporary workplace. It's business travel. Maybe the home office is the bit she's missing. Anyway your other thread answers your question.

Also, and I hope I'm not going to blow your mind here, but you aren't an employee of your LTD.

[Jackthedog]

Further question about travel and accomodation expenses.

Hi...I posted a query a few days ago and need a bit more advice please.

I DONT AGREE HER ADVICE IS CORRECT AND SEEMS NOT TO BE APPLIED TO PEOPLE I KNOW IN VERY SIMILAR SITUATIONS. PLEASE ADVISE AND ALSO ANY RECOMENDED ACCOUNTANTS AS I AM LOOKING TO CHANGE ASAP.


The update is:
She came back to me, saying that it’s due to Intermediaries rules applied in April 2016. Which she believes that although I’m outside IR35 I’m still predominantly working in one location on this engagement so therefore not able to claim tax relief on travel and accomodation to the workplace. Is this correct?

She stated:

The 24 month rule relates to temporary workplaces (EIM32075 & EIM32080). Although, I appreciate, it may seem that London can be treated as a temporary workplace, however, as x Consultancy Services Limited is a Personal Service Company (PSC), one also needs to consider the “Employment Intermediaries” guidance (EIM32135), Section 339A ITEPA 2003, that was introduced on 6 April 2016, where it confirms, “…that each engagement undertaken by a worker who personally provides their services through an employment intermediary will be considered a separate employment for the purposes of travel and subsistence. This will mean that generally no relief will be given for home-to-work travel costs and associated subsistence…” for the employee.

My original post detailed further background as follows

I’m new to contracting and have just set up a PSC limited company (am director and am employee) and started as a worker providing IT Consultancy Services.

I have a client for 6 months, and I will be working with them 100 miles away from home. On a 5 day week basis. I’m outside of IR35, this has been checked.

My accountant is saying I can’t offset my travel expenses against my revenue so I would reduce my corporation tax bill. Is this really right? She is not a contractor specialist accountant.

They are saying I either get a P11d value and tax implication or I have to pay my expenses personally and claim back through dividend (so would have already paid corporation tax).

I always thought justifiable and appropriate travel expenses to a temporary work location were possible to offset against profit, have I been wrong?

[TheCyclingProgrammer]

You definitely need a better accountant.

The intermediaries travel expense provisions apply to personal service companies ONLY if you are caught by IR35.

If you are outside IR35 you can claim travel costs to a temporary workplace.

https://www.gov.uk/hmrc-internal-man...manual/esm5600

See example 3.

This was all widely published and discussed at the time.

It is also covered here:
I've heard that travel and subsistence expenses are changing? - KF Accounting Services

[northernladuk]

There is an accountant recommendation sticky at the top of the accounting section.

[Jackthedog]

Thank you

Firstly I'd point your accountant at threads such as these and ask her to explain herself in detail why she thinks you can't.

Contractor Expenses: Meal Allowances

or tell her to google it and see what she comes up with.

Secondly...



Based on the quote and this thread I'd go get a contractor specialist pronto...

She’s still saying no...I need a new accountant any recommendations?

She said...

The 24 month rule relates to temporary workplaces (EIM32075 & EIM32080). Although, I appreciate, it may seem that London can be treated as a temporary workplace, however, as jack the dog Consultancy Services Limited is a Personal Service Company (PSC), one also needs to consider the “Employment Intermediaries” guidance (EIM32135), Section 339A ITEPA 2003, that was introduced on 6 April 2016, where it confirms, “…that each engagement undertaken by a worker who personally provides their services through an employment intermediary will be considered a separate employment for the purposes of travel and subsistence. This will mean that generally no relief will be given for home-to-work travel costs and associated subsistence…” for the employee.

I mean she is even using the term employee!!!

[Jackthedog]

Help

I concur with the above. The accountant is wrong.

Any recommendations?

[Jackthedog]

Thank you...can you recommend at all?

Get a better accountant.

Can you recommend any? Ta

[Jackthedog]

Thank you...further question

Hi all, thank for your help. Much appreciated.

I challenged the accountant and she has come back with the following say I still don’t get relief. Does this sound right?

The 24 month rule relates to temporary workplaces (EIM32075 & EIM32080). Although, I appreciate, it may seem that London can be treated as a temporary workplace, however, as Jack The Dogs Consultancy Services Limited is a Personal Service Company (PSC), one also needs to consider the “Employment Intermediaries” guidance (EIM32135), Section 339A ITEPA 2003, that was introduced on 6 April 2016, where it confirms, “…that each engagement undertaken by a worker who personally provides their services through an employment intermediary will be considered a separate employment for the purposes of travel and subsistence. This will mean that generally no relief will be given for home-to-work travel costs and associated subsistence…” for the employee.

On this basis I will get no relief and I don’t agree. Other workers as contractors in my current contract (all through agencies on a similar basis) are able to offset, but I am not. Has she set me up incorrectly as a personal service organisation perhaps?

I need a new accountant who specialises in contractors, can anyone reccomend please?