Home to work Travel and Subsistence and Pension

**SimonMac** · 5 December 2012, 09:06

Originally posted by Case2012 View Post

I recently set up my own limited company and began working in the City of London. I drive to the local tube station, take the tube and spend over 10 hours at my temporary place of employment. My normal place of employment is my home address.

My understanding was that I can claim business mileage, recover the cost of the tube fare and claim subsistence from my employer (my Ltd company). Another accountant told me that this was incorrect and this was not allowable following a recent tax case. He quoted something about the journey being substantially similar to my normal commute.

I am sure that he is wrong. My normal place of employment is my home. The venue that I attend is therefore my temporary place of employment. Its not like I travel from A to B and then changed from A to C (with C being close to B).

Please can some accoutants on this forum confirm that my understanding is correct? Has there been any case this year?

Also, am I correct that I can pay upto 100% of my annual salary into a pension scheme even if I do not pay any tax during the year?

I assume they are talking about the 24 month rules, use the search function (OR google "site:forums.contractoruk.com/accounting-legal 24 month") and read the First Timers guide on the right --->

As for pension, yes you are correct, upto 100% of your pension of £50,000 which ever is the highest although todays mini budget is expected to change that to about £30,000

Welcome to the forum

**LisaContractorUmbrella** · 5 December 2012, 10:17

Did you work in the city before setting up your limited company?

**northernladuk** · 5 December 2012, 10:54

Originally posted by Case2012 View Post

My understanding was that I can claim business mileage, recover the cost of the tube fare and claim subsistence from my employer (my Ltd company). Another accountant told me that this was incorrect and this was not allowable following a recent tax case. He quoted something about the journey being substantially similar to my normal commute.

I am sure that he is wrong. My normal place of employment is my home. The venue that I attend is therefore my temporary place of employment. Its not like I travel from A to B and then changed from A to C (with C being close to B).

Please can some accoutants on this forum confirm that my understanding is correct? Has there been any case this year?

Also, am I correct that I can pay upto 100% of my annual salary into a pension scheme even if I do not pay any tax during the year?

I think you have told your accountant something you haven't told us. 24 month rule is all about geographic location. If you have worked in that location for more than 2 years it effectively becomes your permanent place of work regardless if you think your home is. If you have worked in the city before you started contracting the 24 month clock continues to tick. It only resets when you spend a reasonable amount of time away from that geographic location i.e. out of London and we are talking 6 months plus.

Changing offices in the city does not restart the clock.

Why do you think your accountant is wrong when you don't have an understanding of the legislation he is basing his opinion on?

**Case2012** · 5 December 2012, 13:05

I used to work in the City until Jan 2011. Then I left. I began working again in the City (through an umbrella company) in Sept 2012. After one month I set up my own Ltd company in Oct 2012 and then went to the same temporary work location as I was with the umbrella company.

I am assuming that with the umbrella company my permanent place of employment was my home (as they allowed me to claim T&S). With my own Ltd my permanent place is my home. This all equates to less than 24 months.

**LisaContractorUmbrella** · 5 December 2012, 14:10

Originally posted by Case2012 View Post

I used to work in the City until Jan 2011. Then I left. I began working again in the City (through an umbrella company) in Sept 2012. After one month I set up my own Ltd company in Oct 2012 and then went to the same temporary work location as I was with the umbrella company.

I am assuming that with the umbrella company my permanent place of employment was my home (as they allowed me to claim T&S). With my own Ltd my permanent place is my home. This all equates to less than 24 months.

How long did you work in the city for up to Jan 2011? It sounds as though this may fall under 40% rule

**northernladuk** · 5 December 2012, 14:30

Originally posted by Case2012 View Post

I used to work in the City until Jan 2011. Then I left. I began working again in the City (through an umbrella company) in Sept 2012. After one month I set up my own Ltd company in Oct 2012 and then went to the same temporary work location as I was with the umbrella company.

I am assuming that with the umbrella company my permanent place of employment was my home (as they allowed me to claim T&S). With my own Ltd my permanent place is my home. This all equates to less than 24 months.

If you do one assigment with an umbrella that becomes your permanent place of work though no?

**Case2012** · 5 December 2012, 14:31

From Sept 07 to March 2011 I was an employee paid through PAYE and worked in the City 5 days a week.

Then there was a gap of 18 months before I came back to the City in Sept 2012 (as I was unemployed). Surely this is long enough gap?

Then from Sept 2012 to Oct 2012 I worked for an umbrella company at a completely different location in the City to any of my previous employments. My permanent place must have been my home as otherwise I would not have been permitted to claim T&S. This assignment was for one month.

Then from Oct to Dec 2012 I worked through my own Ltd company.

**northernladuk** · 5 December 2012, 15:14

Originally posted by Case2012 View Post

Then from Sept 2012 to Oct 2012 I worked for an umbrella company at a completely different location in the City to any of my previous employments. My permanent place must have been my home as otherwise I would not have been permitted to claim T&S. This assignment was for one month.

I believe this is wrong... As I mentioned and as can be seen in the threads below the one month assignment in London makes it your permanent workplace.

http://forums.contractoruk.com/umbre...a-company.html

http://forums.contractoruk.com/accou...se-claims.html

**Case2012** · 5 December 2012, 16:17

This may present a problem. However, don't you look at each employment separately? So the T&C for the Umbrella part may be disallowed (unless I work elsewhere for them in the current tax year).

However, under my own Ltd co isn't my permenent place of employment where the company is registered (my home) and what is specified in the employment contract between me and my Ltd company? Thus any assignment or trip away from my permanent place of employment is a business trip and thus allowable?

Home to work Travel and Subsistence and Pension