Reply to: Travel expense - travelcard

[SueEllen]

Yeah, true. Though National Rail pro-rate refunds tend to be on the "less than generous" side, in my experience. And while I don't know I'll be here beyond the 24 months, I don't know for sure I won't, if you see what I mean. And, as a commuter in the the glorious metropolis of London, chances are if I'm not at this client, I'll be at another one within a mile or two, so the annual ticket isn't much of a shot in the dark, really.

Your business use should really follow your contract dates. So buy monthly or period tickets that follow it. Yes it costs slightly more but then you aren't clearly taking the p*ss.

[Lambert Simnel]

I think the devil is in the details of which ticket. You can refund National rail and Oyster tickets pro rata so I would expect the answer to your question would be to stop using the current ticket at the point you KNOW you are going over 24 months, get your money back pro rata and claim what it cost you. Get a new ticket and it's all out of your pocket.

I am guessing most if not all season tickets offer some sort of pro-rata refund.

Easiest thing would be to not buy annual tickets if you know you won't be there

Yeah, true. Though National Rail pro-rate refunds tend to be on the "less than generous" side, in my experience. And while I don't know I'll be here beyond the 24 months, I don't know for sure I won't, if you see what I mean. And, as a commuter in the the glorious metropolis of London, chances are if I'm not at this client, I'll be at another one within a mile or two, so the annual ticket isn't much of a shot in the dark, really.

[northernladuk]

As a slight tangent on this, has anyone had experience of buying annual tickets when still within the 24 months (and the contract end date is also within 24 months), but the period covered by the ticket extends beyond the 24 month deadline?

On one hand, when the annual ticket is purchased, there is no agreed contract beyond the 24 months, so the expense incurred on the day of the purchase would be considered an allowable business expense. However, if there is some form of pro-rata applied to the ticket cost, then it would seem clear that part of the cost should not be considered as being deductible as it results in an entitlement to travel outside the 24 months period.

Any views?

I think the devil is in the details of which ticket. You can refund National rail and Oyster tickets pro rata so I would expect the answer to your question would be to stop using the current ticket at the point you KNOW you are going over 24 months, get your money back pro rata and claim what it cost you. Get a new ticket and it's all out of your pocket.

I am guessing most if not all season tickets offer some sort of pro-rata refund.

Easiest thing would be to not buy annual tickets if you know you won't be there

[Lambert Simnel]

As a slight tangent on this, has anyone had experience of buying annual tickets when still within the 24 months (and the contract end date is also within 24 months), but the period covered by the ticket extends beyond the 24 month deadline?

On one hand, when the annual ticket is purchased, there is no agreed contract beyond the 24 months, so the expense incurred on the day of the purchase would be considered an allowable business expense. However, if there is some form of pro-rata applied to the ticket cost, then it would seem clear that part of the cost should not be considered as being deductible as it results in an entitlement to travel outside the 24 months period.

Any views?

[Clare@InTouch]

While you're starting out is arguably when you most need an accountant, to help you avoid making silly and potentially expensive mistakes before you know better!

Agreed. There are also things that cannot be backdated, so you may be missing out by not appointing an accountant sooner. They may cost you a bit in fees, but a good accountant will save you more than they cost you in the long run.

[aoxomoxoa]

I don't have an accountant yet, trying to attempt everything myself for now as I'm just starting out. I'll most likely get an accountant when things start to pick up.

I guess I'll keep logs in the mean time in case HMRC come knocking.

While you're starting out is arguably when you most need an accountant, to help you avoid making silly and potentially expensive mistakes before you know better!

[fyre]

thanks for the reply everyone. I don't have an accountant yet, trying to attempt everything myself for now as I'm just starting out. I'll most likely get an accountant when things start to pick up.

I guess I'll keep logs in the mean time in case HMRC come knocking.

EIM16067 - Vouchers and credit tokens: transport vouchers: travel cards: examples - just like the 'TheCyclingProgrammer' mentioned, I think I fall into example 2.

[TheCyclingProgrammer]

Oyster don't go back too far - one year I thought I'd leave it until the end of the tax year and download everything in one go, and most of the journeys had gone.

So if you are planning on downloading a record of the journeys, then do it regularly.

FWIW, if you register your Oyster online, you can have journey reports emailed to you on a monthly basis in either CSV or PDF format.

[TheCyclingProgrammer]

Two things:

* "Wholly and exclusively" - which forms part of the general rule for employee expenses - explicitly do not apply for business travel expenses (including travel to a temporary workplace within the 24 month rule). Duality of purpose is not an issue here.

General rule:
http://www.hmrc.gov.uk/manuals/eimanual/eim31660.htm

Travel expenses rules (note the absence of wholly and exclusively):
http://www.hmrc.gov.uk/manuals/eimanual/EIM31805.htm

* HMRC helpfully outline the rules for company provided travel cards in their manual. In short: the claimable amount is the lesser of a) the travel card or b) the total cost of the journeys if they were paid for individually. In other words, if the travel card costs less than the equivalent journeys, its fully allowable, if its not, the maximum allowable cost is the cost of the journeys and the excess is a benefit.

Read this:
EIM16065 - Vouchers and credit tokens: transport vouchers: travel cards: overview

[LisaContractorUmbrella]

Clothes are another general exception it seems - I had to hire a tux for a business networking event but clothes are not allowed as a business expense claim.

Yep quite right BIM37910 - Wholly & exclusively: expenditure having an intrinsic duality of purpose: Clothing

[MPwannadecentincome]

Potentially, yes. Have a read of the Contractor Expenses and in particular make sure you understand the "24 month rule" and if it applies to you or not. I don't think there are any tax implications to using the season ticket for personal use at other times, so don't worry about that.

You may also be able to claim £5 for lunch (and potentially other meals) taken at work or while travelling.



Generally speaking an expense may be borderline if there is some "duality of purpose" and if the expense is not "wholly and exclusively" incurred in the course of your business. In reality though there are exceptions to this.

For example, many people clam for a PC/laptop/iPad for work but they also make substantial personal use of it and this is often allowable.

You can also claim a mobile phone provided the contract is in the company name and paid by the company rather than you personally.

Do you have an accountant? If not then you will need one sooner or later so you should get one and have a chat to make sure you aren't paying more tax than you have to.

Clothes are another general exception it seems - I had to hire a tux for a business networking event but clothes are not allowed as a business expense claim.

[DirtyDog]

Concur, just keep some backing info on journeys used. In theory, I suppose HMRC could ask for logs, you can print off logs for Oyster AFAIR, but in reality that would be unusual.

Oyster don't go back too far - one year I thought I'd leave it until the end of the tax year and download everything in one go, and most of the journeys had gone.

So if you are planning on downloading a record of the journeys, then do it regularly.

[Wanderer]

I currently buy a monthly travelcard on the oystercard (as it makes sense financially) - from my own pocket. It's purely for work as I need to get bus/tube/train to get to the client office. Am I allowed to expense this through my limited company?

Potentially, yes. Have a read of the Contractor Expenses and in particular make sure you understand the "24 month rule" and if it applies to you or not. I don't think there are any tax implications to using the season ticket for personal use at other times, so don't worry about that.

You may also be able to claim £5 for lunch (and potentially other meals) taken at work or while travelling.

I read that because I 'coul'd use it outside of work (ie. weekends) and that is where the tax implications rise. Has anyone had any experience with this?

Generally speaking an expense may be borderline if there is some "duality of purpose" and if the expense is not "wholly and exclusively" incurred in the course of your business. In reality though there are exceptions to this.

For example, many people clam for a PC/laptop/iPad for work but they also make substantial personal use of it and this is often allowable.

You can also claim a mobile phone provided the contract is in the company name and paid by the company rather than you personally.

Do you have an accountant? If not then you will need one sooner or later so you should get one and have a chat to make sure you aren't paying more tax than you have to.

[Jessica@WhiteFieldTax]

It's much like a monthly train season ticket, you can travel around on it at the weekends on personal stuff but you can still claim it as a legitimate expense. The HMRC guidelines do allow you to have company funded things and use them for personal life as long as the primary purpose is for work, the key phrase is "Not significant private use".

On travel, the guideline I was told many years ago by a tax accountant that HMRC will deem it acceptable for things like this is if it's cheaper to buy a season ticket for the travel duration than individual daily tickets. On trains, for most season tickets that means 3+ days per week of business travel on the ticket. Any other use outside of business travel is irrelevant in terms of "significant private use" as you're actually saving the company money by buying a season ticket.

Concur, just keep some backing info on journeys used. In theory, I suppose HMRC could ask for logs, you can print off logs for Oyster AFAIR, but in reality that would be unusual.

[northernladuk]

Hi Everyone,

I apologize in advance if this question has already been posted, I did do a search but could not find anything on this.

Strange as there are quite a few posts on exactly this.

https://www.google.co.uk/search?q=oy...sm=93&ie=UTF-8