Subcontractors mileage - rely on Mellor or Kenyon case?

Subcontractors mileage - rely on Mellor or...

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Hello

Perhaps an easy one, but Im stuck!

I have a client who is a subcontractor. For most years his mileage has been high, he is an electrician and has worked on a variety of sites during each year.

For this last tax year - I have received a payment summary from a Contractor, and he has worked for 40 out of the 52 weeks on the same site.

I have read some of the tax cases on this, and yes, he keeps his tools at home, sorts out work from home etc, but, would / could this be considered as normal commuting and disallowable?

To make matters worse, his income is quite a lot less this year, and his cost to income ration (if this mileage was included) would be in the region of 25% - and he would therefore received a very large CIS refund.

Any thoughts on this particular case would be helpful - I do know that these situation are not cut and dried !

Many thanks

Replies (3)

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By Steve Kesby
24th Apr 2013 11:46

I'd keep your eye out...

... for the Tim Healy decision. It's listed as being due to be heard by the Upper Tier Tribunal tomorrow, but then it'll be a few months before the decision is released.

Whilst the claim principally concerns accommodation costs (subsistence costs have been rightly refused on grounds of necessity due to a home from home arrangement and his travel costs from the temporary accommodation were evidentially unsubstantiated), the underlying question is the same; did he continue to be home-based (in Chester) or was he based in London for the duration of the time that he was performing in Billy Elliot?

My own view is that 10 months isn't sufficently permanent for something to be considered to be a base. Somewhere over a year might be, certainly once you've reached 24 months (as applies to the employed).

Is your 40 weeks a continuous period? If it's not, it strengthens your case.

I think Kenyon had one main contract and it was inconclusive the extent to which Mellor had many contracts (I vaguely recall the evidence being unclear in that respect).

What was significant in Mellor was that he worked on drawings at home, having nowhere else to do it.

In common with Horton, Mellor entered into contracts at home.

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By pembo
24th Apr 2013 11:46

permanent or temporary place

Seem to recall the rule for site based workers used to follow the 2 year criteria and also had to account for over 40% of your time so in theory he should be OK. I would be relaxed about this as case law has to square with the facts so go for it but make the client aware that this is a grey area and HMRC may challenge it with the usual possible consequences.

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By levelheaded1903
24th Apr 2013 13:10

Many thanks Steve & Pembo, I have written to the client to voice my concerns, and I will look out for the Healy case too.

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