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Am I eligible for claiming my travel expenses?

Q. I am IT consultant and working for the same client for last 4 years. First two and half years the deliverables were different (say job role 1) and last 1.5 years the deliverables were different (say job role 2). I have terminated my assignment 10 days before the actual end date. I have closed my existing limited company (strike off) in progress.

After another 10 days, now, the same client has a requirement to in job role 1 for consultant, I have now opened a new limited company and new contract agreement is between the new company and the agency but the work location is the same through out 4 years and going forward…

Would you please let me know, am I eligible for claiming my travel expenses? I commute 4 days a week to the client place.

My accountant confirmed that I can start claim the travel expenses as it is a new company and does it doesn’t matter if you were working in the same location previously.

Thank you in advance and please feel free to contact me if you need any further information.

A. We would suggest that you do not continue claiming expenses in the new company if you are providing the same or similar services in the same location as your previous company. HMRC may well take the view that this is a form of tax avoidance as functionally the only thing that has changed would be your trading vessel – nothing will have changed in your arrangements to warrant a reset of the clock, so to speak.

It would also be worth having a discussion with your accountant around the company distributions act (a bit more information here) as this is likely going to be a more pressing concern if you are forming a new company within a short timeframe providing substantially the same services.

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1 thought on “Am I eligible for claiming my travel expenses?”

  1. Big Bird

    On company distributions act link:

    Economic impact

    This measure is not expected to have any significant macroeconomic impacts.

    The costing accounts for a behavioural response whereby taxpayers will find ways to reduce their tax burden as a response to this change

    *** another exercise to make tax payers mad for little benefit ***

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