Reply to: City of London

[TheCyclingProgrammer]

Under the cost based approach, all of London is one place!

Which is, for the most part, how HMRC see it, but once again it depends on context. Travelling from Essex to West London could cost significantly more (and take longer) than travelling to East London so you might argue they are two different workplaces.

Obviously, the further you have to travel to get to London in the first place, the less of an impact moving to different parts of London has on the cost and time of your journey.

[Anonimouse]

How?

They're less than 20 minutes apart and adding zone 1 to a travel card is about £10 a week.

That's the difference between weekly train only and weekly travel card allowing tube or dlr to CW.

[BoredBloke]

You've got to remember that when HMRC look at a change in journey, the first thing they will look at is not the overall distance, but the journey itself and most importantly the cost of that journey.

So on one hand, whilst you are right that you have to look at the change in context and that a small change is a bigger percentage difference on a short commute, you also have to consider that a small change to an already short commute is unlikely to make a substantial difference to the cost and time of that journey. Its on this basis that HMRC will deem the change to not be "substantial", not the overall distance.

So if it comes down to the cost, it costs about the same to travel from manchester to Heathrow as it would to travel from manchester to canary Wharf. Under the cost based approach, all of London is one place!

[Smartie]

I hope this won't be your argument when you are hauled up infront of HMRC.

Gotta think of the bigger picture here. We are talking travel across the whole of the UK, different counties and even countries with GB. 5 miles is not substantial compared to a switch from Manchester to Edinburgh.

It was somewhat tongue in cheek however it is a substantial change in journey. It's also SE rather than South.

I personally wouldn't chance this as the cost in not claiming is relatively low.

If I later got a role up in the city which is 15 miles NE and on the train/tube rather than car/bus I would however be very tempted to argue the toss.

I don't really buy this global/national point of reference that you're using though I need to do some more reading on it. Using a global reference, you could argue that we'd have to work in, say, Germany after being in London in order to claim travel expenses. After all, the difference in 200 and 400 miles journeys within the UK is not substantial compared to our global opportunities.
It doesn't make a lot of sense.

[northernladuk]

But that's the point I was saying - what is substantail? I live near Manchester - If I have a job at Canary Wharf, can I still claim expenses if I then get a role on the west of london. Its about a 20 mile difference, but is that substantail given that the overall commute is 200 or so miles? In this case the percentage of the change is small while the 2 places are geographically quite seperate. But on a short commute a small change in the location has a big percentage difference in the overerall commute

In my mind substantial is enough to warrant relocation. A permie wouldn't relocate for a 10 mile change in location so why should HMRC give tax relief on the same to a contractor?

[TheCyclingProgrammer]

But that's the point I was saying - what is substantail? I live near Manchester - If I have a job at Canary Wharf, can I still claim expenses if I then get a role on the west of london. Its about a 20 mile difference, but is that substantail given that the overall commute is 200 or so miles? In this case the percentage of the change is small while the 2 places are geographically quite seperate. But on a short commute a small change in the location has a big percentage difference in the overerall commute

You've got to remember that when HMRC look at a change in journey, the first thing they will look at is not the overall distance, but the journey itself and most importantly the cost of that journey.

So on one hand, whilst you are right that you have to look at the change in context and that a small change is a bigger percentage difference on a short commute, you also have to consider that a small change to an already short commute is unlikely to make a substantial difference to the cost and time of that journey. Its on this basis that HMRC will deem the change to not be "substantial", not the overall distance.

[TheCyclingProgrammer]

All this discussion has reminded me about the OTS recent report on travel and subsistence expenses (in the wider context of expenses and benefits rules). Did anybody read it? It goes in to great lengths about how the 24 month rule and the rules on permanent bases could be improved. It even moots the idea of completely rewriting the rulebook and allowing pretty much all travel. I found it interesting.

There's a summary on CUK here:
OTS report: close-up on travel and subsistence :: Contractor UK

The whole report is here:
https://www.gov.uk/government/public...-second-report

[BoredBloke]

I hope this won't be your argument when you are hauled up infront of HMRC.

Gotta think of the bigger picture here. We are talking travel across the whole of the UK, different counties and even countries with GB. 5 miles is not substantial compared to a switch from Manchester to Edinburgh.

But that's the point I was saying - what is substantail? I live near Manchester - If I have a job at Canary Wharf, can I still claim expenses if I then get a role on the west of london. Its about a 20 mile difference, but is that substantail given that the overall commute is 200 or so miles? In this case the percentage of the change is small while the 2 places are geographically quite seperate. But on a short commute a small change in the location has a big percentage difference in the overerall commute

[TheCyclingProgrammer]

And HMRC (whose opinion matters slightly more) would say that 2.2 miles is not substantial

But HMRC do also show an example where overall distance isn't a deciding factor, *if* the journey itself (and most importantly, the cost) is significantly different (yes I'm referencing *that* bridge example again).

[northernladuk]

I'll be moving offices soon, changing from a 7.2 mile journey to a 5 mile journey.
This is around a 30% reduction in distance and also cost.
94.3% of scientists (and statisticians) would agree that 30% is a substantial change

I hope this won't be your argument when you are hauled up infront of HMRC.

Gotta think of the bigger picture here. We are talking travel across the whole of the UK, different counties and even countries with GB. 5 miles is not substantial compared to a switch from Manchester to Edinburgh.

[The Spartan]

I worked quite happily around the north west for a good 10 years before having to cast the net further and further from home due to the ever declining number of commutable contracts. House prices are cheaper where I live, but that is also part of the problem. This differential means that I can't not afford a house in London given what my house up north is worth. Also I have a family who are firmly rooted up here - upping sticks and moving 200 miles south is not really an option. So the choice is to take a lower paid crap role somewhere in the country while I wait for the 24 month rule to be reset. As I said much earlier on, I'm on a tax imposed excile from London.

The point I'm trying to make (badly) is that I do not benefit from the expenses. The money I spend goes to the owner of a cheap hotel, a train company and series of places selling food. Given the choice I'd happily take a lower paid commutable role and get to stay at my cheaper home and eat food in my house and commute using my car. Unfortunaltly these roles are very few and far between (I'm on a commutable one now and the pay is tulipe) There should be some recognition in the fact that you have people like me who rather than sit around and watch everything go tits up, they are prepared to get up each monday at 4am to catch the 5:05 out of manchester, stay in some tulip hole, eat tulip food and spend time away from their loved ones rather than accept the situation up north and sign on.

I can see your point as it's the same for me all be it I've only been in London for around 5 months, the majority of decent paying contracts are down this way and I do the Mon-Fri routine. I see money spent on expenses as money wasted too and like you said it averages out at near £100 a day in most cases, now I would love to work closer to home but I know that isn't going to happen anytime soon. Given I'm from Wales there's no way I could afford to buy down this way as prices are insane and to be honest I'm not that fond of London that I would want to.

[BoredBloke]

But you've chosen not to live in London, and presumably you're benefitting from significantly cheaper property prices or rent. Why should your travel expenses be tax free forever to support that choice?

I worked quite happily around the north west for a good 10 years before having to cast the net further and further from home due to the ever declining number of commutable contracts. House prices are cheaper where I live, but that is also part of the problem. This differential means that I can't not afford a house in London given what my house up north is worth. Also I have a family who are firmly rooted up here - upping sticks and moving 200 miles south is not really an option. So the choice is to take a lower paid crap role somewhere in the country while I wait for the 24 month rule to be reset. As I said much earlier on, I'm on a tax imposed excile from London.

The point I'm trying to make (badly) is that I do not benefit from the expenses. The money I spend goes to the owner of a cheap hotel, a train company and series of places selling food. Given the choice I'd happily take a lower paid commutable role and get to stay at my cheaper home and eat food in my house and commute using my car. Unfortunaltly these roles are very few and far between (I'm on a commutable one now and the pay is tulipe) There should be some recognition in the fact that you have people like me who rather than sit around and watch everything go tits up, they are prepared to get up each monday at 4am to catch the 5:05 out of manchester, stay in some tulip hole, eat tulip food and spend time away from their loved ones rather than accept the situation up north and sign on.

[Bunk]

But that's part of the problem. As a percentage thats a fair chunk of the overall commute. To look at it another way - if my commute was previously 200 miles and its changed to a different site 20 miles away, in terms of the overall, that's not a massive percentage change, but it is in terms of the location. Probably the difference between Heathrow and Canary Wharf if your commute starts in Manchester.

The main problem I have with the 24 month rule is that it excludes me from working in a specific location for a period of time. My day rate in London tends to be 400-500 a day. My expenses tend to knock this down by about 100 a day - accomodation travel and food. That's about 25k a year. This is 25k that I don't have to extract from the business via a salary and batter my tax code on money that I have to spend to actually do the job.

But you've chosen not to live in London, and presumably you're benefitting from significantly cheaper property prices or rent. Why should your travel expenses be tax free forever to support that choice?

[BoredBloke]

And HMRC (whose opinion matters slightly more) would say that 2.2 miles is not substantial

Edit: Of course, if it's 5 miles in the opposite direction, then yes, that is substantially different.

But that's part of the problem. As a percentage thats a fair chunk of the overall commute. To look at it another way - if my commute was previously 200 miles and its changed to a different site 20 miles away, in terms of the overall, that's not a massive percentage change, but it is in terms of the location. Probably the difference between Heathrow and Canary Wharf if your commute starts in Manchester.

The main problem I have with the 24 month rule is that it excludes me from working in a specific location for a period of time. My day rate in London tends to be 400-500 a day. My expenses tend to knock this down by about 100 a day - accomodation travel and food. That's about 25k a year. This is 25k that I don't have to extract from the business via a salary and batter my tax code on money that I have to spend to actually do the job.

[Bunk]

I'll be moving offices soon, changing from a 7.2 mile journey to a 5 mile journey.
This is around a 30% reduction in distance and also cost.
94.3% of scientists (and statisticians) would agree that 30% is a substantial change

And HMRC (whose opinion matters slightly more) would say that 2.2 miles is not substantial

Edit: Of course, if it's 5 miles in the opposite direction, then yes, that is substantially different.