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Temporary workplace

I have a client who works on railway signalling through his limited company.

His contract renewal makes him fall foul of the 24 month rule . . . . or does it? My understanding of his circumstances was that, although he was not office-based, his temporary workplace was 'London'. Digging a bit deeper, a) he works on a specific line, b) he could be working on any part of that line on a given day, c) the line is essentially London based, but d) the line is 60 miles long.

http://www.hmrc.gov.uk/manuals/eimanual/EIM32282.htm

This is the closest I've come to any HMRC guide on the matter.

Thoughts on this gratefully received.  

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28th May 2012 15:53

Andy

You are right it does come up quite a bit and never been settled definitively one way or the other.

Some would argue that to have a temporary workplace there needs to be a permanent one first.

I've seen it given (to one of our employees in fact) where tax relief was given against a BIK on the P11D (it was fuel home to head office) which I argued was commute but the employee convinced the good people at HMRC that he had no permanent place of work (incorrect but they didn't ask me) and thus all his travel was temporary.

There is also a danger that London could be seen as a permanent place of work, as you have hinted. Again i haven't seen oit but i do warn my employers that we do sail close to the wind on the definition of temporary workplace with various sites being only a few tube stops apart.

Perhaps a solution is to break down the line into more distinct geographic areas with specific reference to these in the contract, thereby asserting that there are several temporary locations contractually referred to. I don't know if it'll work but it's a thought.

D

 

 

Thanks (1)

S.339(8)

I'd say that the circumstances described make the line a permanent workplace under the wording of S.339(8) ITEPA 2003:

"An employee is treated as having a permanent workplace consisting of an area if:

(a)the duties of the employment are defined by reference to an area (whether or not they also require attendance at places outside it),

(b)in the performance of those duties the employee attends different places within the area,

(c)none of the places the employee attends in the performance of those duties is a permanent workplace, and

(d)the area would be a permanent workplace if subsections (2), (3), (5), (6) and (7) referred to the area where they refer to a place."

See the rest of S.339 for the other sections referred to.

I think the suggestion Democratus has made will simply result in three permanent workplaces. Can your chap not find a reason to make a visit to a place in his 60-mile patch of track that's closest to home, perform some duties, and then move on? He's then engaged in business travel around his permanent workplce.

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Thanks guys

George Attazder wrote:

Can your chap not find a reason to make a visit to a place in his 60-mile patch of track that's closest to home, perform some duties, and then move on? He's then engaged in business travel around his permanent workplce.

It might put passenger safety at unnecessary risk but, hell, if it's going to save him some tax I have a professional responsibility to encourage it.

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29th May 2012 15:02

@ george

Wouldn't disagree with your final point, it was a long shot. I was using the less than 40% of time at one loaction to make this work in my head.

 

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