Expense Claim after 2 years with same (not sure) end client

[Gonzo]

OK, it looks like we don't agree and I am probably wrong.

If anyone is interested the full lowdown is here.
http://www.hmrc.gov.uk/paye/exb/overview/basics.htm

I remain to be convinced that if HMRC are investigating your tax return and determine that you have received an expense repayment that should have been treated as salary that they will at the same reassess your employers' NI returns, but ho hum.

The intricacies of the UK tax system are so not my problem any more and I should refrain from commenting in the future.

[Robot]

Eh?

HMRC distinguish between

• Expenses - which are not taxed
• Benefits in Kind - which are taxed

So the risk for the contractor is that anything that yourCo has refunded you as an expense could be disallowed by HMRC and reclassified a Benefit in Kind and therefore tax is due.

Surely the risk for the contractor is for it to be treated as a net salary payment; net salary attracts class 1 NIC, Class 1a NIC and tax whereas a BIK attracts only Tax and Class 1a NIC.

Tigerinhunt what has your accountant said about this?

a) Treat it as a BIK
b) Treat it as a Net Salary payment

Robot

[northernladuk]

I think that we agree, we are just disagreeing about the reasons why we agree.

The fact we agree on anything is pretty good going on here. Must be the Christmas spirit!

[Gonzo]

This is not a BIK as HMR&C see this as ordinary commuting, and as the employer is paying the employees travel HMR&C see this as net salary. So PAYE, Employees and Employers NIC is payable.

Eh?

HMRC distinguish between

• Expenses - which are not taxed
• Benefits in Kind - which are taxed

So the risk for the contractor is that anything that yourCo has refunded you as an expense could be disallowed by HMRC and reclassified a Benefit in Kind and therefore tax is due.




I think that we agree, we are just disagreeing about the reasons why we agree.

[Robot]

EDIT - Actually, you should have stopped claiming travel the moment that you found out you would be at this site for two years or be prepared to pay tax on the BIK.

This is not a BIK as HMR&C see this as ordinary commuting, and as the employer is paying the employees travel HMR&C see this as net salary. So PAYE, Employees and Employers NIC is payable.

[MarkOD]

Client is irelevent, it's the location that matters. if we're talking about contractors in London then that's another can of worms

[northernladuk]

/Yawn . Like this has never been asked before. Search search search..

Also as you probably won't use the search have a look at Malvolio's blog which has an interesting article on this..

http://www.lpwcs.com/wordpress/

In a nutshell new company doesn't matter. If it is in the same geographic area it counts. The idea is that if you are going to work in a different area to which you live 2 years was deemed a reasonable amount of time before you would relocate there.

[NotAllThere]

...
What do the knowledgeable and experts think here? Please suggest.
...

I suggest you ask someone knowledgeable and expert in these matters. Such as, an accountant.

If you don't trust your accountant's advice, then get a new one.

[Gonzo]

Hi,

Soon I will be starting my 3rd year with the same group and my accountant has advised that I wont be able to claim travel and subsistence expenses any more.

However point to note is that new contract is going to be with different end client (read company) as compared to previous 2 years. I will be working with different team at a different location within the same building.

I think because contractually and factually I am going to work for a different company (It is a separate legal entity) even if it is part of the same business group, it should be considered as a different client. My accountant says that because it is same location, I cannot claim above two kinds of expenses.

What do the knowledgeable and experts think here? Please suggest.

Thanks in advace.

Regards,
tigerinhunt

The Inland Revenue guidance about where the boundaries of what can and what cannot be counted as different temporary workplaces are are frustratingly vague.

However, the temporary workplace refers to your travel to the location and not the company that you work for and a move within the same building is unlikely to cut it.

Sorry. Your accountant is correct.

EDIT - Actually, you should have stopped claiming travel the moment that you found out you would be at this site for two years or be prepared to pay tax on the BIK.

[MPwannadecentincome]

there are other threads covering similar questions, verdict seems to be it is the location that counts.

[tigerinhunt]

Hi,

Soon I will be starting my 3rd year with the same group and my accountant has advised that I wont be able to claim travel and subsistence expenses any more.

However point to note is that new contract is going to be with different end client (read company) as compared to previous 2 years. I will be working with different team at a different location within the same building.

I think because contractually and factually I am going to work for a different company (It is a separate legal entity) even if it is part of the same business group, it should be considered as a different client. My accountant says that because it is same location, I cannot claim above two kinds of expenses.

What do the knowledgeable and experts think here? Please suggest.

Thanks in advace.

Regards,
tigerinhunt