Travel to work

JodieR

I'm doing the accounts for a self employed dental hygienist. Most of the year she has worked for 1 dental practice but for the last few months she worked for 2. The previous accountant has claimed travel costs for her in the previous year, but I'm pretty sure she gets caught by these rules: http://www.hmrc.gov.uk/manuals/bimmanual/bim37675.htm and therefore shouldn't claim anything in respect of travelling (she doesn't make any business journeys other than driving to work, and doesn't do any work at home).

Am I being too strict here?

PGM

These two paragraphs see to contradict each other?

"In the cases above the taxpayer would normally visit a large number of different premises to carry on business. The position is rather different where a subcontractor works at one or a very small number of different sites during the year. In such a case it may be that the premises where the taxpayer carries on the business are, in fact, the business base. If this is so, the cost of travelling between the taxpayer's home and the business base should be disallowed.

Following the decision in Horton v Young [1971] 47TC60 (see BIM37620), where a subcontractor works at two or more different sites during a year travelling expenses between the taxpayer's home and those sites should normally be allowed. "

JodieR

Yeah, it's a bit ambiguous, but the way I understand it is if a subbie accepts a contract building a building which takes say 10 months to complete then that's fine, he can claim travel costs there, but once the building is complete he knows he's going to have to move on somewhere else. In my client's case she's working at the same place(s) indefinately and that in my eyes is the difference and I can't see that HMRC would allow her travel costs, but I would so like to be wrong here!

PGM

Got to agree with you Jodie, that makes sense.

villapb

She can claim for upto 24 months, the 24 rule, after that she cant.........she if self employed should have her trading address as her home for example and she travels to the dentist, it can claimed as travel expense ltd, ir35, umbrella etc etc.

villapb

Jodie if she is self employed how can hmrc prove its indefinite, as the work contract could end any time..........do you see what im trying to say, hence the 24 rule.

JodieR

Thanks for the post villapb but do you have a link back to this rule as the only '24 month rule' I can find relates to employees and not the self employed.

villapb

Hi Jodie, the last month or so i have got involved with ir35 contracts, cis and umbrella, forgot your client was self employed. If your client has worked at the dentist for 24 months plus for example. Is your client sole trader or ltd by the way, your client has to be careful she dosen,t fall into ir35 as a disguised employee, also what does her contract state ie length of contract. If she is ltd or umbrella travelling is claimed...........have to be careful as sole trader on a long contract, because if hmrc decides she is ir35 then they will want the tax and ni she hasn,t paid and travelling will be the least of her problems..........hope i have not opened a can of worms for you. Also i have seen that most claim the 45p allowance for travel and i have never seen hmrc query it tbh............sometimes they under claim ie 30p a mile etc from the contract. Would be good to know what is the terms of the contract cheers. Its the contact length that i need to be clear on..........