Q. As a contractor working in London, but living 4 hours away I often work from my home office and then travel down to London staying overnight for say 2 nights per week. I therefore incur expenses for fuel, train, hotel and subsistence, which I personally pay for and then claim back from my limited company, (they are not reimbursed by the client). I am coming up to the 24 month mark on my current contract, it may possibly extend by another 3 months, this is not yet agreed. I am about to take on another London based client, and will therefore split my week between the two clients, say 2 days and 3 days each week. Can I continue to claim back from my limited company even though the journey and the hotel don’t change? Do I just switch the client name I incur expenses for in my accounting records?
A. Unfortunately, you will no longer be able to claim travelling expenses because an employee’s workplace can change without significantly affecting their journey to work.
I would refer you to sections 4.6 & 4.7 of HMRC guidance 490 – Employee Travel. This states:
Where an employee moves offices from Cardiff to Edinburgh there is clearly a change of workplace affecting the employee’s journey to work. But the position is different if an employee moves to a new office in the next door building. In these circumstances there is no significant effect on the employee’s journey to work and under the tax rules there is no change of workplace.
This rule prevents employers from making small changes to the place where an employee works to take advantage of the temporary workplace rules. Where there is no significant change to an employee’s journey the rule operates to treat the 2 workplaces as being the same.
Where a change in location has a significant effect on:
- the journey an employee has to make to get to work; and
- the cost of the journey to work
the new location is a new workplace even if it is geographically close to the old workplace.
Section 4.9 goes on to say:
Applying this rule may have the effect of denying tax relief for travel over longer distances in metropolitan areas than in rural areas. A change of location from Queensway to Bank could involve 8 stops on the Central line of the London Underground at no extra cost. In these circumstances the modification rule comes into play. But 10 stops to the north on a train from Preston gets into Scotland, and 10 stops to the south could involve a journey beyond London, both at considerable extra cost.
What happens if your journey to work changes significantly but shorter or cheaper than before?
10 miles south as opposed to 20 miles north say.
What happens if your journey to work changes significantly but becomes shorter or cheaper than before?
10 miles south as opposed to 20 miles north say.
I work offshore & I am limited company.
My issues that I seem to be paying a lot more corporate tax personal tax than anyone I know & work with.
also I am have to travel to France to get a hip replacement op done & I am paying for this out of my own pocket & as I am limited.
My accountant is telling I cannot claim any of the flights hotels meals back.
can you advise on the best forward due to the fact with been limited I do not get paid when I am off work
I am coming up to the 24 month point of a contract. Due to the nature of the work I visit different sites. I generally work from my home office a couple of days a week, visit my clients head office maybe one day a week and visit client sites (temporary building sites) two days a week. One of the building sites, though temporary, is also close to a two year duration. The client sites are spread around the country and every week is different depending on the demands of the job.
Can I claim travel expenses to my clients head office and can I claim to my clients temporary site office once the 24 months is up?
Hi, if you have a question about the 24 month rule please submit it via Contractor Doctor https://www.contractorweekly.com/ask-a-question/
The reply quotes conditions for “Employee” and “Employer” – what if I am Self Employed, and the client is a different client?
Surely, what has been quoted is in place to stop an Employer moving an Employee around sites to make them “Temporary”.
If it is a different Client and different site of work, does this not then make it a different workplace altogether, and a different “Employer” if you look at it like that. Then surely claiming the travel and sustenance for another temporary workplace becomes allowable?
Just to add to that – It is a separate job for a separate client and becomes a separate engagement, which should be judged in it’s own right on whether it is at a “temporary” or “permanent” workplace.
A geographical area in itself only becomes a permanent “workplace” when ALL of a few conditions are met (EIM 32190)
“Some employees do not have a single site as a permanent workplace but instead have an employment for which their duties are defined by a particular geographical area. For these employees the whole of that geographical area is treated as their permanent workplace where all of the following conditions are met:
– the employee has no single place that is his or her permanent workplace and
– the employee attends the area regularly and
– the duties of the employee’s employment are defined by reference to that area
(see EIM32191 “The condition that the employee’s duties are defined by reference to a particular area means more than that they spend all or most of their time working in a particular location. That may be a matter of personal choice, or the employer’s clients may happen to be concentrated in a particular area. That, on its own, is not enough to satisfy the test.
There must be evidence that the employee’s duties are actually defined by reference to a particular area. That evidence might be found in the employee’s contract of employment, or terms and conditions of service, or letter of engagement. Or the employer may have a specific area of responsibility (for example, a police authority), so that the employee’s duties may be said to be defined by the employer’s area.
Unless you can show that the employee’s duties are in fact “defined by reference to” a particular area, the test is not satisfied even if, as a matter of fact, the employee does happen to spend most of his or her time working in or around a particular place.”) and
– if the area was to be treated as a workplace it would be a permanent workplace.