P87 form - am I elligable?

cramatdel

Hi all,

I work as a trainee auditor in Leeds but live in Sheffield. I get reimbursed for the shorter of the distance from my house to clients' offices and our Leeds office and the clients'. If I work in or around Leeds, I frequently get say 4 miles' worth of expenses but have to drive 65.

Can I therefore claim tax relief on the miles that I'm not reimbursed for when I'm working at a client's office? As I can gather, I can't claim for normal trips to our office but can for miles I've not been reimbursed for when working at a temporary location - can anyone confirm whether this is correct?

Thanks,
Craig

chrismac1

Triangular travel rules apply. You first identify the "normal" place of work - not always easy, in this case your main office. Let's say its 50 miles round trip to that.

Suppose you are in Rotherham and that is 25 miles round trip, less than 50 so nil to claim. Next week you're in Ilkley, 80 miles round trip - so you claim for 80 less 50 = 30 that week.

jimmo

chrismac1 wrote: »

Triangular travel rules apply. You first identify the "normal" place of work - not always easy, in this case your main office. Let's say its 50 miles round trip to that.

I’m sorry but the concept of triangular travel for tax relief purposes is so far out of date that you would struggle to find any mention of it on the HMRC website. The only reference I found was to Tax bulletin 14 which seems to have been issued in 1994.
Having said that many employers use triangulation or the “lesser of” rule for their expenses payments and often cite HMRC rules as a reason for not paying more but it can work both ways.
The HMRC method nowadays (or should I say when I retired in 2006) is to question whether, when you leave home in the morning, your journey is a normal commuting journey or a business journey.
Take a look at example 4 in this link
http://www.hmrc.gov.uk/manuals/eimanual/EIM32011.htm
Turning to the OP’s own circumstances it may be possible to identify each journey from home to clients’ offices as business journeys fully qualifying for tax relief. Possible, but I doubt it.
On the information we have so far, it seems far more likely that his claim will fail.
1) It seems quite likely that his journeys from home will be seen as ordinary commuting or something very similar. Take a look at this link.
http://www.hmrc.gov.uk/manuals/eimanual/EIM32300.htm
2) He could be regarded as having his duties defined by reference to a particular area (Leeds)
This is the first page about that.
http://www.hmrc.gov.uk/manuals/eimanual/EIM32190.htm
So, if cramatdel can establish that his journeys from home to clients premises are business journeys he may have a pretty substantial tax relief claim.
However, if he tries and fails the upshot will be that the mileage payments he currently receives, free of tax, from his employer under triangulation or the lesser of rule will prove to be taxable. However that should not be his problem. If he has been paid something which is taxable but not taxed that is his employer’s fault but the direct result of his failed claim will be a PAYE audit of the employer.

chrismac1

I stand corrected, sorry. Things were a lot simpler when I was an auditor.

So it looks like he now has to establish whether his job is defined by a permanent location - in which case the full cost of each journey to a different one is claimable unless it is along substantially the same route as his normal journey - or a general geographical area, in which case tough luck!

Your employer almost certainly has been down this track already with other employees. They should have some sort of arrangement in place with HMRC, given how complex this situation has become and how much cash is at stake for them.