Mileage for Directors employed by Parent Company

Mileage for Directors employed by Parent Company

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Hi All,

I have a client that owns several companies via a parent company.

The director is employed by the parent company, and his services invoiced to the subsidiary companies – there is no VAT group, so VAT is charged normally.

My question is regarding travel and mileage expenses, and if I’m honest is a bit of a longshot.

The parent company is run from (and is registered to) the director/shareholder’s home address.

He spends 85% of his working time working at the premises of one of the subsidiaries, and the other subsidiaries are registered and run from his home.

Can he claim mileage or travel expenses from the parent company premises (happens to be home address) to the premises of the subsidiary (where he spends 85% of his working time)?

Thank you in advance.

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By taxhound
27th Oct 2013 18:40

two places of work

They are connected companies.  I believe HMRC would take the view that he has two normal places of work, so mileage from one to the other is not claimable.  Others may disagree and some would claim it and get away with it because it was never checked, but I would not advise a client to claim this mileage.

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By Steve Kesby
28th Oct 2013 07:46

I agree

If the only employment is with the parent company, then the subsidiary's site is a permanent workplace, which makes the travel there non-allowable ordinary commuting.

If he were employed by both companies though and performed substantive duties for the parent company at home before and after travelling to the subsidiary, the travel would be allowable under S. 340 ITEPA 2003, which doesn't have an ordinary commuting rule.

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