Expenses - I don't believe this

[abbeyit]

I am on a 3 month contract and it was exteded by a further 7 weeks. I travel to different sites every week from Swindon in the south to Aberdeen in the north and today I received this from my umbrella company.

"As you have only been engaged on one assignment whilst in our employment HMRC now regard the workplace as a permanent workplace and you are no longer able to claim travel and accommodation expenses.

That applies to your final invoice and I have deleted the expenses from the timesheet and raised a replacement invoice."

I can only find the 24 month rule and the 40% rule, neither of which apply to me and I can find nothing that says HMRC consider you to be permanent because you only work on one assignment. Please advise.

[mudskipper]

I am on a 3 month contract and it was exteded by a further 7 weeks. I travel to different sites every week from Swindon in the south to Aberdeen in the north and today I received this from my umbrella company.

"As you have only been engaged on one assignment whilst in our employment HMRC now regard the workplace as a permanent workplace and you are no longer able to claim travel and accommodation expenses.

That applies to your final invoice and I have deleted the expenses from the timesheet and raised a replacement invoice."

I can only find the 24 month rule and the 40% rule, neither of which apply to me and I can find nothing that says HMRC consider you to be permanent because you only work on one assignment. Please advise.

Your umbrella is right - if there is only one workplace. But you have been working in different places, so I don't think this should apply.

Edit: Just googling, and all the umbrellas do seem to talk about one assignment - however I still believe implicit in that in one workplace...

[mudskipper]

See this thread discussing similar issue:

http://forums.contractoruk.com/accounting-legal/82011-umbrella-cancelling-previous-expense-claims-2.html

[centurian]

Defining your workplace as your home has always been a fuzzy interpretation of the rules, particularly for those that perform their work at the same location, week in, week out. The 24 month and 40% parts only apply on the assumption that your temporary location really is temporary in the first place.

So if umbrella's are starting to crack down on this, it's more just a case of taking a stricter intrepretation of the rules, rather than any change in the rules.

But in your case, you do genuinely appear to be working at temporary locations, so relief appears to be in full compliance with the letter and spirit of the rules.


However, even if the brolly won't cough up, you can always claim the relief directly from HMRC on a self assessment form. The key part of the claim is that you need your employer to inform you where they consider your permanent place of work to be - and then claim all travelling between that place and the actual work locations.

[BlasterBates]

What he means is your place of employment with your umbrella is Aberdeen. It might be how HMRC are deciding to interpret existing rules. So if you'd used the umbrella in London for three months and then were assigned to Aberdeen you could have had expenses.

Not saying this is right but I can see the logic. Since it doesn't matter to the Umbrella other than compliance it sounds to me this is coming from an HMRC clamp down.

[Support Monkey]

The Umbrella is correct, I think what you should have probably done is put in a mileage claim to your umbrella for the commuting miles to your main closest site\head office (this should have been defined at the outset) then if you went to any other site (even directly from home) you should charge the client anything over the commuting miles

[abbeyit]

I should have stated that I am contracted to a well known outsourcing company based in London and I work from home getting my assignments or temporary workplaces via email. This week was Aberdeen, Leeds, Kilnarnock and Milton Keynes. Should I not be able to claim travel and accommodation which is a subsatntial part of my income then the contract effectively becomes non viable from a financial point of view.

[abbeyit]

UPDATE

After discussions with my umbrella company I received the following reply.

"On the basis that you do not appear to have had a fixed workplace during your assignment I think we can regard your travel and accommodation costs as relating to "temporary workplaces". I will make the necessary adjustments to restore the non-chargeable expenses."

Thanks for evwryones input

[Wanderer]

I can only find the 24 month rule and the 40% rule, neither of which apply to me and I can find nothing that says HMRC consider you to be permanent because you only work on one assignment.

I think the umbrella are correct to do this in many cases but in your specific circumstances it looks like they have applied the rules incorrectly and they should have allowed your expenses.

The law is Section 339(5) ITEPA 2003 and HMRC's guidance is in EIM32125 which says:

A period of attendance at a workplace for a limited duration does not make that place a temporary workplace if the employee attends in the course of a period of continuous work (see EIM32080) that can be expected to last for all, or almost all, of the period for which he or she is likely to hold, or continue to hold, that employment.

What they say in EIM32125 is that if you work at a single work place for more than 80% of the entire duration of your employment then you are not entitled to claim travelling expenses to that workplace at all (even within the 24 months/40% rule). In your situation it appears that you don't work at a single work place and I think the umbrella have incorrectly applied the rules here.

I would ask the umbrella to reconsider it and escalate it to someone more senior to review and refer them to the guidance in EIM32125. Most likely they will try to fob you off with "computer says no" so push them hard.

It may also be worth speaking to HMRC and ask what your options are and see if they can clarify it for you... You may be forced to reclaim the tax on your self assessment though working through an umbrella is supposed to mean that you don't have all that hassle...

Good luck!

[Wanderer]

I will make the necessary adjustments to restore the non-chargeable expenses.

Fantastic result!