Headache over 'temporary workplace' and expenses rules

[Frazzled contractor]

Hi there, I hope someone can help.

I have been working for an organisation on a one year fixed term contract within IR35.

We verbally agreed at the start of the contract that I would work in their Oxford office for the first 3 days of the week and from home the remaining two days (Surrey and where my business is registered). There was also an expectation that on some days I would attend meetings in their London office. None of this was set out in a contract. I mentioned that I would probably seek accommodation and cover this myself due to the good day rate.

Until December I pretty much stuck to this, staying in accommodation on Monday and Tuesday nights in Oxford and travelling back on Wednesday nights. My accountant (my brother and a novice in this area of accountancy) said To keep receipts for my accommodation, food (including evening meals), mileage as I was working away from home. However, my working pattern has now changed. I have not stayed in accommodation since January preferring to drive back and forth and tend to work in Oxford one or two days a week for which I log mileage and keep receipts for coffees, lunch. If I attend meetings in London I log tube travel, lunch and refreshments. If I work from home, I log business meeting lunches (rare).

My accountant was sent a myth form which states that you cannot claim mileage to your offices or places of work from home. Now he is worried that since December and a stop in accommodation for Oxford that I should not be submitting my mileage for day travel back and forth. However, I've seen information elsewhere which states that this is fine if you have a temporary place of work. I guess I'm trying to work out whether my Oxford, London and Surrey bases are all temporary?

This week I worked from London for two days and Surrey three days. I did not go to Oxford at all. Next week, it will be Oxford once, maybe twice and Surrey for the rest. So as you can see there is no fixed pattern since December.

This has left me totally confused as to where I can claim mileage, tube travel and general lunch, refreshments.

If anybody can help you will save me from a very bad headache or worse still, a fine and a repayment.

My current contract ends in June and there is a strong likelihood that it will be extended. No detail yet as to the length, could be 6 months or longer. Does that have an impact?

[malvolio]

If you're on a FTC, presumably being paid net of PAYE, you are an employee of the client. As such you are not entitled to any expenses for travel to and from your place of work. (And as an aside, FTC's and IR35 are mutually exclusive).

If it's any other kind of a deal, (which is likely given they are looking to extend you which would otherwise be illegal), then you can claim the tax back on expenses to a temporary place of work for up to 24 months. Except there was a recent case where that was found not to be case; each of the worker's various locations was held to be their permanent place of work hence expenses are not claimable. I doubt that applies to you, but you need an accountant to work that one out.

So three points to ponder: why don't you understand the nature of your engagement, do you now see why proper contracts are necessary and why are you entrusting your income to someone who doesn't know what they're doing?

[Frazzled contractor]

I was recruited through a well known agency, my contract is with them on a Ltd day rate for their client, which is a government organisation. My mistake by mentioning a FTC, that's the way I think of it as my contract is for one year. So yes, you're right to pick up on that and highlight the inaccuracy.

Still confused as to whether I should continue claiming back on mileage and travel from home office to Oxford and London. Certainly not clear on what is classed as 'temporary workplace' if as you say there was a recent case (was that the Dr?)

My brother is an accountant, just works in a different area of accountancy.

[malvolio]

I was recruited through a well known agency, my contract is with them on a Ltd day rate for their client, which is a government organisation. My mistake by mentioning a FTC, that's the way I think of it as my contract is for one year. So yes, you're right to pick up on that and highlight the inaccuracy.

Still confused as to whether I should continue claiming back on mileage and travel from home office to Oxford and London. Certainly not clear on what is classed as 'temporary workplace' if as you say there was a recent case (was that the Dr?)

Yes, but personally I don't think that case applies here, since YourCo has a registered office from where you do some substantive work. But perhaps get hold of one of the contractor accountants and see what they think.

My brother is an accountant, just works in a different area of accountancy.

Have you seen the size of Tolley's Guide to Taxation these days? I'm a IT consultant, I just work in a different area of IT to most. Just don't ask me to write anything in Java...

[mudskipper]

Sounds like you're OK - most of us claim mileage from home to client office within the 2 year rule.

[Frazzled contractor]

Help needed from an accountant - temporary work place / mileage and expenses

As I have three different places I tend to work from (my registered office at home in Surrey, then some full days spent in Oxford and London each week) I'm finding it difficult to understand whether all three would be classed as 'temporary' and therefore fine to claim back on travel and mileage and food in each area.

Basically, that is what I've been doing so far.

Does the temporary issue even apply if my contract is only for a year? I'm not finding it easy to understand the HMRC guidelines.

Any accountants that can help?

[malvolio]

As I have three different places I tend to work from (my registered office at home in Surrey, then some full days spent in Oxford and London each week) I'm finding it difficult to understand whether all three would be classed as 'temporary' and therefore fine to claim back on travel and mileage and food in each area.

Basically, that is what I've been doing so far.

Does the temporary issue even apply if my contract is only for a year? I'm not finding it easy to understand the HMRC guidelines.

Any accountants that can help?

You permanent place of work is the location from where you conduct your business, which in your case is your home (as it is for most contractors), the logic being it is from there you do substantive work on behalf of YourCo - find work, raise invoices, manage your company accounts, etc., etc. Therefore anywhere else you go to to deliver your services is by definition a temporary location (disregarding the 24 month rule for now) and the costs of you working there are allowable against income tax since they are not a benefit in kind but a necessary business outlay.

These are basics, tbh. Perhaps you should start from here Section 3.5 (but read the whole thing).

[Brussels Slumdog]

You permanent place of work is the location from where you conduct your business, which in your case is your home (as it is for most contractors), the logic being it is from there you do substantive work on behalf of YourCo - find work, raise invoices, manage your company accounts, etc., etc. Therefore anywhere else you go to to deliver your services is by definition a temporary location (disregarding the 24 month rule for now) and the costs of you working there are allowable against income tax since they are not a benefit in kind but a necessary business outlay.

These are basics, tbh. Perhaps you should start from here Section 3.5 (but read the whole thing).

If my home is in Brussels and my Umbrella company is in the North of England ,is my permanent place of work home or the location of the umbrella company.

[malvolio]

If my home is in Brussels and my Umbrella company is in the North of England ,is my permanent place of work home or the location of the umbrella company.

Sigh...

We're talking about contractors. You are an employee of the umbrella. If you only have one workplace while you're with them then that's your permanent workplace. If you have several, then each is a temporary one provided you are engaged under an overarching employment contract when your permanent location is deemed to be the umbrella's head office.

[LisaContractorUmbrella]

No-one finds it easy to understand HMRC guidelines and, between you and me, I think that's how they like it so don't worry if this is all a bit confusing. First thing I would say is, you are working in a specialised sector - you may be better off with a specialist accountant. This may help answer your question:

ESM3225 - Application of the tax rules: travel expenses - example

The legislation treats all engagements as being part of a single employment with the intermediary. Therefore, the rules in respect of travel expenses should be applied on that basis when working out whether the place of work is temporary or permanent.

For example:

Mr C, an IT contractor provides his or her services through a limited company (which he owns) C Services Ltd. The company has a series of contracts under which his services are provided to different clients around the country. Mr C regularly travels from his home to work at the premises of the company's clients. He meets the expenses of that travel personally.

Provided Mr C does not expect to spend more than 40% of his or her working time at any one site he is entitled to a deduction for all journeys from home to the client's premises. If he does spend more than 40% of his time at a single site, but the engagement is both expected to, and actually does, last for no more than 2 years, a deduction for travel costs will also be available