Home to work Travel and Subsistence and Pension

[Case2012]

I'm sure this on this. My permanent place of employment ought to be what is stated in my employment contract, unless I work at the temporary location for a period of 24 months.

The Ltd company is based at my home therefore that ought to be my permanent place of work and subject to the 24 month rule and working away from my home would be a temporary location.

The other accountant's reasoning what based on a tax case involving a barrister. The barrister went from A to B. Then A to C. B and C were close so HMRC disallowed the claim as the journey was substantially similar.

Lets see what Lisa says on this one. Thanks for your help.

[malvolio]

I'm sure this on this. My permanent place of employment ought to be what is stated in my employment contract, unless I work at the temporary location for a period of 24 months.

The Ltd company is based at my home therefore that ought to be my permanent place of work and subject to the 24 month rule and working away from my home would be a temporary location.

The other accountant's reasoning what based on a tax case involving a barrister. The barrister went from A to B. Then A to C. B and C were close so HMRC disallowed the claim as the journey was substantially similar.

Lets see what Lisa says on this one. Thanks for your help.

Well sorry but wrong.

Firstly, to keep it simple, the 24 month rule works by counting back from the known (or expected) end of your current gig. If for the 24 months up to that point you have spent 40% or more of your work time at that location, that's it, the rule applies. And location is a rough geogrpahic area like the Square Mile or Birmingham: think of it as going to the same main line terminal. As soon as you know (or expect) this is going to happen, your expense claims stop.

For the umbrella case, you can claim travel if you expect to have more than one gig while working for them. If you didn't, you're supposed to repay the tax on your expenses since it has become a BIK.

Your contract or YourCo might define your permanent workplace as a given location but after 24 months, nobody cares about that, it's where you are based. It's carp, but it's the law, and it ain't about to change.

And finally YourCo can still pay for it all if you fall foul of the rule but you are gaining the benefit so you have to declare it as earned income on your SAR.

[LisaContractorUmbrella]

Afraid Lisa is going to say the Malvolio is quite right

[Wanderer]

For the umbrella case, you can claim travel if you expect to have more than one gig while working for them. If you didn't, you're supposed to repay the tax on your expenses since it has become a BIK.

Good explanation but this part is not correct according See EIM32080 and EIM32084.

What counts is that the worker's expectation is that they will work on multiple gigs for the umbrella. If the worker reaches the point where they reasonably expect that they will only work one gig for the umbrella, they are obliged to stop claiming from that point onwards.

It's important to note that as with the 24 month limit, the previous claims for tax relief on travel and subsistence are not retrospectively invalidated. As HMRC put it in EIM32080, "The effect of the rule is not altered where the expectation does not match the outcome".

[malvolio]

Good explanation but this part is not correct according See EIM32080 and EIM32084.

What counts is that the worker's expectation is that they will work on multiple gigs for the umbrella. If the worker reaches the point where they reasonably expect that they will only work one gig for the umbrella, they are obliged to stop claiming from that point onwards.

It's important to note that as with the 24 month limit, the previous claims for tax relief on travel and subsistence are not retrospectively invalidated. As HMRC put it in EIM32080, "The effect of the rule is not altered where the expectation does not match the outcome".

Except for you to have a temporary workplace you must first have a permanent one. For Umbrella users that only ever work at one location, that is clearly wherever they are working. Once you have more than one, then you can have temporary ones since none of them are permanent.

It's a bit of a grey area, admittedly, and you can argue it both ways.