Business Mileage

Meatballs

Trying to work out HRMCs mileage stuff is a nightmare, can anyone help me clarify my situation?

I am an IT professional, the majority of work will require that I am at a client site to perform my duties. These will mostly be short engagements week - month at various locations anywhere in UK.

When I am not on client site I can work from home, and would only need to go to my contractual office for adhoc meetings, reporting, training etc.

Is my permanent workplace: home, office, or no permament workplace?

What can I claim for travel to client sites? Full mileage or (Mileage - Distance to office)?

What can I claim for travel to the office? Full mileage or nothing?

Cheers,

Ben

chrismac1

Ben, 2011 has been a good year for your tax position - albeit you may not have realised this! So far it is Travelling Taxpayer 3 HMRC 0 !! One of those cases concerned a scaffolder travelling from Grimsby to Birmingham, not directly relevant to you. But in my opinion the other two Tribunal cases are directly relevant and, on the basis of your post, I would be comfortable signing off on full mileage in your accounts. The two cases - summarised:

Mellor v CRC 2011

Mellor was a self-employed electician. It was held that such a person must have some sort of base to co-ordinate things. Mellor was preparing quotes, sales invoices and so on from home. It bwas held that this could not have been done at client sites, hence his home was his base, hence all mileage was allowable in full from home to client sites.

Kenyon v CRC 2011

Prima facie your case is stronger than Kenyon's, who was a pipe fitter from the Wirral working primarily - but not solely, there were other jobs around London - on the 2012 Olympics site. Once again he was organising new work from his home at weekends, once again this was held to be his home base and all mileage from the Wirral was OK.

chrismac1

It must be noted that the HMRC website has not been updated to reflect these defeats, and still just has old cases which HMRC mainly won. So no doubt up and down the country there are numerous HMRC staff who remain blissfully ignorant of these losses, and hence will pursue taxpayers on the basis of the older cases. I have a couple of clients who will seek to rely on Mellor and Kenyon if the dreaded enquiry letter arrives on the mat, and have advised them that the £80 fee protection insurance is money well spent as it means that lack of funds need not be a reason for backing down.

System

As I read it the OP is an employee and not self-employed/contractor. Totally different ball game. Whether he is home or office based is down to wording in his contract. This will then determine what is claimable.

chrismac1

Ah, right - Ben are you an employee or self-employed? If an employee then these cases don't apply to you.

JimmyTheWig

Meatballs wrote: »

contractual office

I would have guessed that this implies that the office is the base, but I don't know.

Meatballs

I'm an employee, but thought that, according to HRMC your permanent workplace was totally independent of your contractual agreement and depended on your real working circumstances.

What I've work out so far:

My employee will pay expenses for business travel to client site - commuting costs. E.g. Client 100 miles, office 50 miles, I can claim 50 miles at 35 pence per mile.

However I am still ok to claim tax relief from HRMC on the 50 miles my employee has removed, as it is business mileage as travel to a temporary workplace.

So I claim from employer
50x35p

from HRMC:
50x40p Tax Relief
50x5p Tax Relief

I guess I only get 20% of the total if it's tax relief?


However if I have a permanent working base of Home, or I'm classed as having no permanent working base I could claim full travel from work...

BoGoF

chrismac1 wrote: »

Ah, right - Ben are you an employee or self-employed? If an employee then these cases don't apply to you.

OMG another admission of getting it wrong.....does that make it MSE tax experts 3 Chrismac1 0..........

jimmo

In the original post you said that when you are not working at clients' premises you can work at home. That is very different to being obliged to work at home. On that basis your home is not a permanent workplace for tax purposes.
When you leave your home to go to work you need to consider whether your journey is a normal commuting journey or a business journey. For tax purposes it is one thing or the other. There is no such thing as a mixed journey and you definitely do not commute to a temporary workplace such as clients' premises.
Your employer seems to be using a travelling expenses system which used to be known as "triangulation" or "the lesser of rule ".
For tax purposes that went out years ago, some time in the nineties, I think.

Meatballs wrote: »

So I claim from employer
50x35p

from HRMC:
50x40p Tax Relief
50x5p Tax Relief

I guess I only get 20% of the total if it's tax relief?

Arithmetically you are correct but I think you will come to terms with the red tape better if you think along the lines of:
I can claim from employer 50* 35p = £17.50
My tax allowable expenses are 100* 40p = £40.00
but I have received £17.50 of that from my employer.
Therefore I am entitled to claim tax relief on the net figure of £22.50.
At 20% tax that will produce £4.50 in your pocket.
Just a reminder here, 40ppm applies to the first 10,000 business miles a year up to 5 April 2011. It is now 45ppm. Annual business mileage in excess of 10,000 is 25 ppm
Now, coming back to your occasional journeys to your employer's office, that is likely to be far more difficult. This is where the question of whether your home is a permanent workplace becomes significant because that will dictate whether those journeys are normal commuting or business journeys.
When I was at HMRC if somebody who was an employee claimed that their home was a permanent workplace I would ask to see a copy of the employment contract which specified an obligation to work at home and a copy of the employer's Health and Safety inspection of the (home) workplace.
On this forum you may have shot yourself in the foot by saying you can work from home, rather than saying you are obliged to work from home and I would suggest that you take the tax relief you are clearly entitled to and can handle yourself.
If you want to claim tax relief on your journeys to the office, it may be possible, but you will almost certainly need professional assistance and my guess is that would cost you a lot more than the potential tax saving.
You may also find this earlier thread useful.
https://forums.moneysavingexpert.com/discussion/2735807

amz84uk

If an employment contract states that I am required to be flexible in terms of location, would I be entitled to claim tax relief if I am seconded to another location for a short period of time? What would be classified as my BASE location?