Reply to: 2 year rule (slightly different to the usual question)

[DrEvil]

But its your company charging the clientco for travel expenses. Your company can't pay you the expenses without tax implications as the 24 month rule still applies.

I understand that, however there's nothing to stop myco from charging the client expenses and adding it to the companies coffers is there? Means I won't get the money tax free but better than nothing.

[Acme Thunderer]

Ahh .. think its sinking in now. I'm forgetting that my home is my permanent workplace not temporary, even though I've not been hear much recently!

No worries I'll just charge the client expenses for any travel they want me to do

But its your company charging the clientco for travel expenses. Your company can't pay you the expenses without tax implications as the 24 month rule still applies.

[DrEvil]

Ahh .. think its sinking in now. I'm forgetting that my home is my permanent workplace not temporary, even though I've not been hear much recently!

No worries I'll just charge the client expenses for any travel they want me to do

[malvolio]

Totally and utterly irrelevant from HMRC's point of view. Look through some of the examples they give - it doesn't matter whether you change contracts, role, clients, office buildings etc. It's the general locality that matters.

In your case, both your permanent and temporary workplace location have not changed at all. Be very careful about arguing otherwise, or you open yourself up to HMRC claiming that the past 2 years is not claimable.

Agreed

What has changed is the amount of time you spend at the temporary workplace has reduced - the question is whether this reduction is sufficient to continue claiming - and the general consensus is leaning towards it being not.

Also agreed, until you can look back and see that your total time on client site has been less than 40% of you working time for that 24 months counting back from the current end date of your contract.

Deep, isn't it

[centurian]

Although I'm sticking with the same client it is a completely new contract expecting different deliverables

Totally and utterly irrelevant from HMRC's point of view. Look through some of the examples they give - it doesn't matter whether you change contracts, role, clients, office buildings etc. It's the general locality that matters.

In your case, both your permanent and temporary workplace location have not changed at all. Be very careful about arguing otherwise, or you open yourself up to HMRC claiming that the past 2 years is not claimable.

What has changed is the amount of time you spend at the temporary workplace has reduced - the question is whether this reduction is sufficient to continue claiming - and the general consensus is leaning towards it being not.

[Bunk]

The HMRC rules states that a temporary WORKPLACE becomes permanent after 24 months. However it will have only been my temporary workplace for 20 Months. Nothing to do with client its all about the area.

Although I'm sticking with the same client it is a completely new contract expecting different deliverables and work from my company and the work will be done in MY OFFICE not the clients.
Given that 80% of the week I'll be at my new WORKPLACE (home) isn’t it fair to assume that home for expense purposes is my new workplace?


All the rules HMRC states clearly talk about WORKPLACE not CLIENT. Therefore since my new workplace is home any travel outside of that, i.e. to a client office 100 miles away should be deemed a business expense?

But that client office is the same one you've been working at for the previous 20 months, so travel expenses to that location come under the 2 year rule.

Your home is your permanent workplace. You claim travel expenses for 20 months working 5 days a week at a temporary workplace. You're now cutting down to 1 or 2 days a week there but it's still a temporary workplace and more importantly it's still the same temporary workplace. A new contract and working at home some of the time doesn't change that.

[DrEvil]

The HMRC rules states that a temporary WORKPLACE becomes permanent after 24 months. However it will have only been my temporary workplace for 20 Months. Nothing to do with client its all about the area.

Although I'm sticking with the same client it is a completely new contract expecting different deliverables and work from my company and the work will be done in MY OFFICE not the clients.
Given that 80% of the week I'll be at my new WORKPLACE (home) isn’t it fair to assume that home for expense purposes is my new workplace?


All the rules HMRC states clearly talk about WORKPLACE not CLIENT. Therefore since my new workplace is home any travel outside of that, i.e. to a client office 100 miles away should be deemed a business expense?

[northernladuk]

Excellent just what I was hoping for, something that's completely in the grey area

I can certainly see both sides however since the two year rule is based on location not client I thought my new location might have swung it in my favour ?

Accountant is of the opinion that I can't claim because its with the same client but I'm not convinced either way.

It would have done but you are asking about your OLD location therefore you fall over. If your accountant had same same clients location then yes I would agree.

[DrEvil]

Excellent just what I was hoping for, something that's completely in the grey area

I can certainly see both sides however since the two year rule is based on location not client I thought my new location might have swung it in my favour ?

Accountant is of the opinion that I can't claim because its with the same client but I'm not convinced either way.

[malvolio]

Heigh ho...

You permanent workplace is your home. Everywhere else is temporary. You can claim expenses to a temporary workplace provided that either

a) You won't have or haven't workedthere continuously for a 24 months period* ("there" being based on journeys, not actual office)

or

b) you haven't spent more than 40% of your time there for as long as you've been working there.

That's two criteria, not one. Don't conflate them. Either one works.

HTH


*24 months is worked in both directions from where you are today. So short intermediate engagements may still leave you in scope of the 24 month rule.

[centurian]

Short answer - you've got us stumped on that one.

Unless there is a specific case or example, it could be argued either way

[mudskipper]

The original contract site never was the main workplace - that's why you could claim expenses - your 'permanent' workplace was home, and the contract site was temporary. So arguing that you can continue claiming because your permanent workplace now really is home doesn't sound like it'll work.

[xoggoth]

Tend to agree with C in Touch here. The original contract site is no longer the main workplace.

[Craig@Clarity]

But if you take the 40% as a rolling factor the old site is not at temp one. It is a site he has been at 100% of time in last two years or does this rolling period not work like this? It is the same period we discussed when someone asked how long before you can go back to an old site.

When you put it like that it is grey and open to interpretation I agree. Anyone doing this needs to understand the worse case scenario if it's challenged by HMRC. If I find a tax case, I'll update you.

[northernladuk]

In my opinion, the way I interpret it is the current site is a temporary one since DrEvil hasn't been at the same site for 24 months. His new location is at home which I assume is also his trading address and therefore a permanent location as that is where he is employed from under his own limited company. He performs work from his permanent location and under his contract with his client is required to work 1 or 2 days away from his permanent location which accounts for less than 40% of his time.

It's similar, in my opinion to someone who has a 3 year contract to do specific work for a client but only travels 1 or 2 days to site i.e. less than 40% of their time. It would still count as a temporary workplace regardless of the total length of the contract.

But if you take the 40% as a rolling factor the old site is not at temp one. It is a site he has been at 100% of time in last two years or does this rolling period not work like this? It is the same period we discussed when someone asked how long before you can go back to an old site.