Please confirm this is not a temporary workplace

Please confirm this is not a temporary workplace

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Met a potential on Saturday (special rules for contractors it seems as they're busy on Mon-Fri!)

He is starting a seven month contract around 90 miles from home.

Drives Monday, stays hotel Mon night to Thurs night, and drives home Friday.

I say he can't claim mileage to the hotel/area or the hotel costs as it's not a temp workplace, via the "continuous workplace / fixed term appointment". He's there full time, albeit for just seven months. s339(5).

His contractor mates say he can.

He's fine with my analysis and answer but can someone confirm please.

I thank you.

Replies (14)

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Man of Kent
By Kent accountant
06th Jun 2013 09:51

Continuous work

My reading of this is that the ''continuous work' reference in EIM32080 is where the period of work is more than 24 months.

In your example the period of work is only 7 months, so looking at EIM32080 and EIM32081 I'd say that travel expenses are allowed.

 

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Replying to Ruddles:
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By HeavyMetalMike
06th Jun 2013 09:53

Not per EIM 32125 - "the 24

Not per EIM 32125 - "the 24 month rule is overidden".

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Man of Kent
By Kent accountant
06th Jun 2013 10:06

Ah

Fixed term appointment. - would help if I read the question properly;)

Is he getting paid as an employee or self employed and does he have a contract?

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Replying to tonycourt:
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By HeavyMetalMike
06th Jun 2013 10:16

via his own ltd co, via an agency - who say they don't even want sales invoices, just timesheets!!!

 

There is a contract between his company and the agency.

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By stephenkendrew
06th Jun 2013 10:08

More information needed....

Is he doing this work as an employee (i.e. a one-off seven month contract). If so, the travelling isn't allowed since it's his work place for the whole of the period of his employment - the 24 month rule is overridden.

Is he doing the work as an employee of his own limited company? If so the travelling is allowed since he presumably worked at different locations for the same employer before and after the seven month engagement. The workplace is temporary.

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Replying to Accountingweb123:
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By HeavyMetalMike
06th Jun 2013 10:24

Sorry I thought the clue was in teh question, a contractor. So yes he's workign via his own company.

He works at one place for 7 months. He has indeed worked at the same location beforehand but as a temp employee, via an agency.

Stephen does this change your opinion.

 

 

I disagree that these contractors can work 7 months here, 7 months there (in another direction of course) and say it's all temporary.

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By andy.partridge
06th Jun 2013 10:52

His employer is his limited company, as opposed to the client, and isn't that the crux of the matter that makes the travel allowable?

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Replying to timothyvogel:
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By HeavyMetalMike
06th Jun 2013 11:22

Sorry, Andy but I'm now feeling dense. Why or how does that effect anything?

Forget the client, I agree.

If the company pays the hotel bills, and then pays the director 45p a mile, then we need to look at the status of the workplace, surely?

Or if the costs are all paid by the director and then get reimbursed by his company the same issue?

 

During the employment Mr P will be working 100% at the end client for a 7 month period.

 

Am I the only one who thinks he can't claim?

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By Steve Kesby
06th Jun 2013 11:40

Agree with Andy and Stephen

His employment is with his company and will extend beyond the end of the company's contract with the current end client, at which point his employer company will move him on to work for its next end client, making it a temporary workplace.

Would you still be of the view that it wasn't a temporary workplace if he didn't own the company and was a genuine unconnected employer.

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By sparkler
06th Jun 2013 12:05

Agree that it is a temporary workplace

As others have stated, the workplace is indeed temporary because his employer is his limited company, and he is working at the location for less than 24 months.

If, at the end of the 7 months, his contract is extended, he will continue to be able to claim travel expenses as long as the contract does not exceed 24 months (if at some point he receives a contract extension which finishes after the 24 months have been breached, he can no longer claim expenses from the start of that extension).

 

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By andy.partridge
06th Jun 2013 12:09

Or put another way

If he was unemployed before the commencement of the contract and unemployed after the completion of the contract then it would be right to look at this contract in isolation and to override the 24 month rule. That not being the case here, the 24 month rule applies, I believe.

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By Democratus
06th Jun 2013 12:22

These are tricky

I'd go with the views that this is Temporary, especially if he has a contract of employment which makes him an employee. The Employer controls where he is sent to and as this is less than 24 months the employer can settle the accomodation costs and travel. There is something about split sites and 40% of the time but i don't think that's relevant.

On Sparklers point it is worth noting - it's the point at which it becomes known that the duration exceeds 24 months that the tax relief ceases, not that the expenses can no longer be claimed.

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Replying to PALacc:
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By sparkler
06th Jun 2013 12:38

Director might not have contract of employment

If he's a director of his own one-man-band company, he may well not have a contract of employment as this could lead to minimum wage issues.  I have never considered this to be an issue - would be interested to hear if others require a director to have a contract of employment before they consider that travel expenses to a temporary workplace can be claimed.

Democratus picks out the point about it becoming known that the contract exceeds 24 months, and tax relief ending at that point, and this is indeed well worth impressing upon clients.  If contract 1 starts on 1/1/12 and ends on 31/6/12, contract 2 starts on 1/7/12 and ends on 31/6/13, and contract 3 runs from 1/7/13 to 31/6/14, the travel expenses will cease to be claimable from 1/7/13.  This is a point that clients are often totally unaware of.

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By Steve Kesby
06th Jun 2013 12:59

No need for a contract of employment

S.5 ITEPA 2003 says:

"(1)  The provisions of the employment income Parts that are expressed to apply to employments apply equally to offices, unless otherwise indicated.

(2)  In those provisions as they apply to an office:

(a) references to being employed are to being the holder of the office;

(b) "employee"  means the office-holder;

(c) "employer"  means the person under whom the office-holder holds office."

So being a company director equates to being an employee for the purposes of the travel expenditure rules in S.337 to S.342.

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