Company Miles versus the Tax man

sharkspm

I am an IT consultant working for a small company. Over the last year I have been working at one particular customer which has meant that I need to stay away 2 or 3 nights a week in a hotel that is located 10 miles away from the customer I am visiting.

After a tax visit to the company I am employed by the tax man is asking about my mileage claims. I am totally honest and have claimed for all miles on the trip , whether its going from my house to the customer and also whilst there going to and from my hotel from the place I work at.

I am now worried that I am going to be told that I am not allowed to claim for travel between where I am staying and my place of work.

Does anyone know if am allowed to claim for this or not , as I have always been told by the company I am employed by to tell them all mileage I have done on the trip regardless.

If the company I work for is wrong and I should not have charged for the miles between the hotel and my place of work then I have been given incorrect information , so does make me liable for the money i would owe the Tax man or is the comapy I am employed in the wrong.

The reason this is concerning me is that I must have made around 30 trips in the last year and the mileage for hotel part of the journey is 30 to 50 miles a time which adds up

Kind Regards and Thanks in Advance

taxing

Hi

You haven't said if this is 'your' company or whether you are an employee in someone else's company?

Assuming you are an employee then these are all 'temporary workplaces' and you are entitled to claim the mileage which, I assume your employer has reimbursed to you at 40p per mile for 10,000 miles then dropping to 25p per mile (in tax year) because you are using your own car.

The overnight subsistence (evening meal) and hotel stay should also be okay if you are too far away from home to be able to return home each evening.

Finally, if you are an employee the PAYE inspector will be going after your employer for a settlement: it is unlikely to impact on you for past events but may result in a change of practice going forward (if things haven't been dealt with properly).

Where is the company's accountant in all this? The employer should be taking advice or he could be taken to the cleaners....

Regards.

Oh, if it is your own company - have you heard of IR35???

sharkspm

Thanks so much for replying. I am just an employee of the company. I was just worried that I would not be able to claim for the miles i journey to and back from the hotel.

Again thanks for the response

jimmo

Assuming that your employer pays you a mileage allowance and pays your hotel bills the potential problem the PAYE auditor will be looking at will be the total amount paid to you, not just the mileage between the hotel and the client's premises.
The key question is, whether the client's premises can be regarded as a temporary workplace or a permanent workplace. now taxing has said at post#2 that your client's premises are a temporary workplace. He or she may well be right but, as a former taxman, I would have my doubts because I do not believe you have given sufficient information yet.
If you were a new employee and your first assignment for your employer was at this particular client's premises and it is the only place you have ever worked for your employer the whole of your expenses will be suspect in the PAYE auditor's eyes.
If your employer is an agency or umbrella company the whole of your expenses will also be suspect.
If you have been an employee for a number of years then this particular assignment appears does look like a temporary workplace, but subject to the 24 month rule.
This link is to a contents page in The HMRC manual. Take a look at the links about the 24 month rule.
http://www.hmrc.gov.uk/manuals/eimanual/EIM32000.htm
I hope that gives you an insight into how complicated the problem can become.
Taxing is also correct that the PAYE auditor is looking at the compliance of your employer and if any tax has to be paid your employer will face the bill plus interest and a penalty.
In many ways this is not your problem and, certainly under Tax law, your employer cannot recover any of the tax it has to make good from you. However you presumably need to keep your job and the more you understand this, the better.
If you can fill in the areas of doubt we can make progress.