Self employed mileage allowable? Yes or No.


J

Joe

I've crawled all over hmrc.gov.uk but can't find a definitive answer to
this.

On a self employed basis, am I allowed 40p per mile for my business related
mileage? (the first 10,000 pa)

A friend suggests I am not, because most of my work (self employed) is done
at no more than three locations. He surmises that this would be deemed as
travel to a normal place of work, in the same way as an employed person.


Thanks in advance for any opinters.
 
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M

Martin

Joe said:
I've crawled all over hmrc.gov.uk but can't find a definitive answer to
this.

On a self employed basis, am I allowed 40p per mile for my business
related mileage? (the first 10,000 pa)
Yes - if wholly and exclusively for business, your status as self-employed
is correct and none of the 3 locations is your "home base".
 
A

Alan Ferris

Yes - if wholly and exclusively for business, your status as self-employed
is correct and none of the 3 locations is your "home base".
Not correct at all. You think all self employed can claim commuting
to and from their place of work?
 
M

Martin

Alan Ferris said:
Not correct at all. You think all self employed can claim commuting
to and from their place of work?
You may wish to re-read what I wrote.

Commuting is the process of travelling between a place of residence and a
place of work.

Travelling from your "home base" (which isn't to say your place of
residence) to a client (e.g. plumber on a call out, consultant on a, er,
consultancy) is not commuting in my book - nor HMRC's. Otherwise, every
shop keeper, doctor, dentist, etc would be claiming mileage for travelling
from home to work and back each day.

You are also confusing "place of work" with "normal place of work".

You may find it useful to look at hmrc dot gov dot uk :)))
 
A

Alan Ferris

You may wish to re-read what I wrote.

Commuting is the process of travelling between a place of residence and a
place of work.

Travelling from your "home base" (which isn't to say your place of
residence) to a client (e.g. plumber on a call out, consultant on a, er,
consultancy) is not commuting in my book - nor HMRC's. Otherwise, every
shop keeper, doctor, dentist, etc would be claiming mileage for travelling
from home to work and back each day.

You are also confusing "place of work" with "normal place of work".

You may find it useful to look at hmrc dot gov dot uk :)))
No I simply thought you were reading in to his post one hell of a lot
of assumptions. Nowhere does he say where his base is or even if he
has one.

Care to try again with the facts as presented and not those you wish
to interpret as existing without asking?
 
M

Martin

Alan Ferris said:
No I simply thought you were reading in to his post one hell of a lot
of assumptions. Nowhere does he say where his base is or even if he
has one.

Care to try again with the facts as presented and not those you wish
to interpret as existing without asking?
I've answered the question and see no need to change a word. I challenge
you to come clean and say what you disagree with, and what undeclared
assumptions you think I've made.

Mind you, I do concede that I assumed (1) it's all in the UK, (2) that he
wasn't above the VAT threshold when he acquired his car, (3) he's not
previously claimed "actual" costs for this car, and (4) it's not an example
of the very unusual cases where clients are close together, yet his home is
in a quite different and distant part of the country.

Simply saying "Not correct at all." is both wrong and unhelpful. And saying
"You think all self employed can claim commuting to and from their place of
work?" is a question, not an answer, and is no help to man or beast.

Please give examples of some genuine s/e occupations, which can
legitimately be claimed to be based at home, and yet don't qualify for
claiming travel expenses when visiting clients. (Do bear in mind the OP
didn't say "purporting to be" s/e, nor "falsely claiming" s/e status.

Look forward to your constructive and explanatory response.
 
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R

Ronald Raygun

Martin said:
I've answered the question and see no need to change a word. I challenge
you to come clean and say what you disagree with, and what undeclared
assumptions you think I've made.

Mind you, I do concede that I assumed (1) it's all in the UK, (2) that he
wasn't above the VAT threshold when he acquired his car, (3) he's not
previously claimed "actual" costs for this car, and (4) it's not an
example of the very unusual cases where clients are close together, yet
his home is in a quite different and distant part of the country.

Simply saying "Not correct at all." is both wrong and unhelpful. And
saying "You think all self employed can claim commuting to and from their
place of work?" is a question, not an answer, and is no help to man or
beast.

Please give examples of some genuine s/e occupations, which can
legitimately be claimed to be based at home, and yet don't qualify for
claiming travel expenses when visiting clients. (Do bear in mind the OP
didn't say "purporting to be" s/e, nor "falsely claiming" s/e status.

Look forward to your constructive and explanatory response.
Come on, boys, keep it above the belt. Surely there is no particular
effect which self-employed status as such has on the question. Even a
self-employed person can be carrying out work for a client which is in
all respects identical to work he might otherwise be doing for an
employer, and for which commuting costs would not be an allowable
expense.

It seems to me that the key assumption Alan is alleging you made is
that the OP's "base of operations" (or "office") genuinely coincides
with his home, and that therefore the non-allowable commuting he does,
from home to the office, involves a zero-mile trip, and then that any
travel from office to client sites is genuine business mileage.

If the work he does is of a nature which does not really involve an
office, then travel to the client sites would not be allowable, but
only travel between client sites.

Basically Alan is casting doubt on whether in fact, as you put it, the
OP *can* genuinely claim to be "based at home".
 
M

Martin

Ronald Raygun said:
Come on, boys, keep it above the belt.
Hi Ronald, me old fruit... I thought my comments (and maybe AF's - we shall
see) were all very much above the belt. But I confess I get a bit cheesed
at posters who have forgotten that the idea is to try to help - rather than
slag off respondents without giving any reasons. For all I know, I may be
completely wrong about this, in which case AF's enlightenment is to be
encouraged. However.....
Surely there is no particular
effect which self-employed status as such has on the question. Even a
self-employed person can be carrying out work for a client which is in
all respects identical to work he might otherwise be doing for an
employer, and for which commuting costs would not be an allowable
expense.
I fear you're making the same mistake as AF. We need to avoid having our
horse pushing the cart. The starting point is whether the person is
self-employed. I don't mean "registered" as such with HMRC, but genuinely
s/e. In your scenario, I think he fails sufficient of HMRC's "typical
questions" to be regarded (if anyone looked closely) as an employee. In
which event, the issue doesn't arise (unless exceptionally his home as an
employee is also his "normal place of work"). Remember, commuting is travel
from home to nromal place of work. And in the case of s/e, can also mean to
normal geographic area of work, if a long way away and travelled regularly /
routinely (ref. my earlier post).
It seems to me that the key assumption Alan is alleging you made is
that the OP's "base of operations" (or "office") genuinely coincides
with his home,
No - I specifically haven't made that assumption. It's immataerial whether
his home is also his normal base of operations. Maybe when I used the
phrase "home base" AF or you took that to be residence. If it wasn't
transparent from my first post, it certainly was in my second.

And AF has yet to reveal what he's challenging. But I agree that the OP
hasn't said where his "base" is - neither does he mention his home at all.

But remember, he doesn't need much of a "base" if the nature of his work
doesn't necessitate one. It's sufficient that he has a number of clients,
"passes" sufficient of the "tests" to be classified as s/e, and needs to
travel to clients to do the work. Certainly, having a "base" which isn't at
home doesn't alter anything. He can still claim travel from the base to his
clients.
If the work he does is of a nature which does not really involve an
office, then travel to the client sites would not be allowable, but
only travel between client sites.
No - that is simply not the case (excepted the very unusual cases, as
exemplified in my earlier post)
Basically Alan is casting doubt on whether in fact, as you put it, the
OP *can* genuinely claim to be "based at home".
But that isn't the issue in the OP's question nor in my reply. I suspect
that AF thinks I should check whether the OP is truly s/e. My view is that
there is no need, since the OP is absolutely specific... he said "On a self
employed basis....". Even noting that, I still emphasised the crucial
importance of that status in my first reply.

Interestingly, there is an exception (aka assumption) which has now come to
mind and which I didn't specify in my first reply, and which would certainly
debar some of the travel costs, but I'll keep that to myself for the moment
so I can concede gracefully if AF mentions it.

It's good to talk.... and sorry about the rugby :)))
 
R

Ronald Raygun

Martin said:
I fear you're making the same mistake as AF. We need to avoid having our
horse pushing the cart. The starting point is whether the person is
self-employed. I don't mean "registered" as such with HMRC, but genuinely
s/e.
I don't think that's the case. The only consideration in determining
whether any travel is allowable is whether it is wholly and exclusively
for business purposes. Whether the person is self employed or not is
completely irrelevant unless there is a "necessarily" element to
consider as well (which is an additional requirement which applies
with employment but not with self-employment).
Remember, commuting is travel
from home to nromal place of work. And in the case of s/e, can also mean
to normal geographic area of work, if a long way away and travelled
regularly / routinely (ref. my earlier post).
Quite. Often but not always, a self employed person will have an
office or base of operations which would be deemed his normal place
of work even if most of the work is done at clients' sites to which
he has to travel from tha base. Commuting would be thetravel from
his home to that base, and any travel from that base to client sites
would then be business travel. This is the case even when said base
happens to be a room in his house.
No - I specifically haven't made that assumption. It's immataerial
whether his home is also his normal base of operations.
It is emphatically not immaterial, because travel from home to his
work sites is not allowable, whereas travel between work sites is
allowable, including the case where one of the work sites is his
normal base of operations -- whether or not this is within his home.
But remember, he doesn't need much of a "base" if the nature of his work
doesn't necessitate one.
Agreed.

It's sufficient that he has a number of clients,
"passes" sufficient of the "tests" to be classified as s/e,
It's irrelevant whether he's s/e unless there is a question over the
"necessarily" element.
and needs to travel to clients to do the work.
Irrelevant.

Certainly, having a "base" which isn't at
home doesn't alter anything.
Oh yes, it changes everything.
He can still claim travel from the base to his clients.
Exactly, but he can't claim travel from home to base. And this means
that if his base is his home, he can claim travel form home to clients,
but if it isn't, he can't.
But that isn't the issue in the OP's question nor in my reply.
But it is a pivotal issue on whether the travel is allowable.
I suspect that AF thinks I should check whether the OP is truly s/e.
I don't know what AF thinks, but as I've said before, the OP's
status is not relevant.
My view is
that there is no need, since the OP is absolutely specific... he said "On
a self
employed basis....". Even noting that, I still emphasised the crucial
importance of that status in my first reply.
The status is unimportant. Why do you think it is important?
It's good to talk.... and sorry about the rugby :)))
You've lost me completely. What rugby?
 
T

Troy Steadman

I've crawled all over hmrc.gov.uk but can't find a definitive answer to
this.

On a self employed basis, am I allowed 40p per mile for my business related
mileage? (the first 10,000 pa)

A friend suggests I am not, because most of my work (self employed) is done
at no more than three locations. He surmises that this would be deemed as
travel to a normal place of work, in the same way as an employed person.

Thanks in advance for any opinters.
As you can see from the toys being thrown around, this is a grey area,
but there are plenty of examples on the HMRC website:

http://www.hmrc.gov.uk/manuals/eimanual/EIM32000.htm

Have a look at: "More than one permanent workplace at the same time"
 
M

Martin

Troy Steadman said:
As you can see from the toys being thrown around, this is a grey area,
but there are plenty of examples on the HMRC website:

http://www.hmrc.gov.uk/manuals/eimanual/EIM32000.htm

Have a look at: "More than one permanent workplace at the same time"
"Toys being thrown" etc? Should we stand by when people get it wrong? Eg
What has EIM to do with a s/e issue? "Necessarily" doesn't come into it.
 
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P

PeterSaxton

"Toys being thrown" etc? Should we stand by when people get it wrong? Eg
What has EIM to do with a s/e issue? "Necessarily" doesn't come into it.
I wonder what Joe has made of the above!

He wants advice not an argument.

Martin gave sensible advice based on the information provided. If he
had discussed every possible situation however unlikely he wouldn't
get any paying work done!

Ronald and Troy usually give some useful advice but Alan's
contributions are in the same league as Tim and Dumbo. He's been
trying to cause trouble in uk.finance recently, also. When I was using
Agent I had them kill filed but now I use Google Groups I don't think
anything similar is possible.

Peter
 
T

Troy Steadman

"Toys being thrown" etc? Should we stand by when people get it wrong? Eg
What has EIM to do with a s/e issue? "Necessarily" doesn't come into it.
The whole mileage allowance thing is non-SE except by concession, so
what do you do - pretend there is no information available?

The principals are pretty clear and as you've pointed out to AF, it's
merely a question of getting round it :)
 
M

Martin

Ronald Raygun said:
Martin wrote:

The only consideration in determining
whether any travel is allowable is whether it is wholly and exclusively
for business purposes. Whether the person is self employed or not is
completely irrelevant unless there is a "necessarily" element to
consider as well (which is an additional requirement which applies
with employment but not with self-employment).
You're confusing different issues. If employed, then travel from home to
normal place of work is not allowable. This is nothing to do with the
"necessarily..." test, which applies to so many other employee deductions.
It's enshrined in statute.

If self-employed, then (with a few exceptions, outlined earlier in the
thread) then travel from home to Base of Ops is not allowed, but travel from
base to clients is allowed. If base is at home, then travel from base to
clients is not disallowed just because it happens also to be home.
It is emphatically not immaterial, because travel from home to his
work sites is not allowable
Yes it is. (You say "his work sites" - by which I assume clients' sites,
when the s/e person does some work).
whereas travel between work sites is
allowable, including the case where one of the work sites is his
normal base of operations -- whether or not this is within his home.
That's not at issue.
It's irrelevant whether he's s/e unless there is a question over the
"necessarily" element.
It is relevant, because the Base of Operations (an s/e term) has to be
established, whereas in employment "normal place of work" has to be
established.
Oh yes, it changes everything.


Exactly, but he can't claim travel from home to base. And this means
that if his base is his home, he can claim travel form home to clients,
but if it isn't, he can't.
But I'm not talking about travel from home. I've consistently explained
that he could claim travel from base - regardless of whether base happens
also to be home.
But it is a pivotal issue on whether the travel is allowable.
No it isn't. Let me remind you - and to be fair to AF - he hasn't mentioned
home at all. And my replies all relate to "base", not "home".
The status is unimportant. Why do you think it is important?
Because the rules are different. For instance, travel between different
employments is not allowed, but travel between different clients (for s/e)
is allowed. Another example - "employed" claim cannot exceed earnings, but
for s/e it can.

Self-employment is absolutely and fundamentally different from employment -
and the different rules reflect that.
You've lost me completely. What rugby?
Do please tell me you're being ironic. Argentina 19 - 13 Scotland...?
Isn't Edinburgh in scotland...? Aren't you in Edinburgh...?

Anyway, I await AF's explanation of what I got wrong. And I feel so sorry
for the OP who must have hoped for some unanimity in the replies.
 
M

Martin

Troy Steadman said:
The whole mileage allowance thing is non-SE except by concession, so
what do you do - pretend there is no information available?
Soryy Troy - not sure what you mean here. Do you mean "mileage allowance"
specifically, or travel costs generally, however calculated?
The principals are pretty clear and as you've pointed out to AF, it's
merely a question of getting round it :)
I agree it's clear - but not aware I've suggested "getting round" anything.
 
R

Ronald Raygun

Troy said:
The whole mileage allowance thing is non-SE except by concession, so
what do you do - pretend there is no information available?
The central question is whether travel is allowable. Whether it is
to be done by strict apportioning of all costs or by mileage
allowance is a side issue, but I think we can assume that the
conditions under which the concession applies have been met.
The principals
Who? :)
are pretty clear and as you've pointed out to AF, it's
merely a question of getting round it :)
The point has been made that it is important to establish whether the
chap really is self-employed. This point is incorrect, isn't it?

It would only matter if there is a possibility that he might be
deemed to be employed, in which case the only difference to the
question of whether travel would be allowable is that one would
need to establish that the travel expenses were incurred "necessarily"
for work purposes (a requirement if employed but not if self-employed)
in addition to the usual requirement that they be incurred "wholly and
exclusively" for work purposes (which applies in both cases).

Assuming, if we may, that "necessarily" would not be a stumbling block,
the question of his SE status is completely irrelevant.

What is important is the question of his "home base". Travel between
home and work is commuting and is not allowable, irrespective of whether
you're employed or self-employed. The question is where "work" starts.
If he keeps an office at home, which acts as his base of operations,
then his "commute" ends when he walks from his breakfast table into
this office. Work starts there, and travel to the first client site
is then work travel, and allowable. If he does not have an operations
base other than client sites, then travel from home to the first client
site would be private travel, and not allowable; only travel between
client sites would be allowable.
 
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M

Martin

Ronald Raygun said:
The central question is whether travel is allowable. Whether it is
to be done by strict apportioning of all costs or by mileage
allowance is a side issue, but I think we can assume that the
conditions under which the concession applies have been met.


Who? :)


The point has been made that it is important to establish whether the
chap really is self-employed. This point is incorrect, isn't it?

It would only matter if there is a possibility that he might be
deemed to be employed, in which case the only difference to the
question of whether travel would be allowable is that one would
need to establish that the travel expenses were incurred "necessarily"
for work purposes (a requirement if employed but not if self-employed)
in addition to the usual requirement that they be incurred "wholly and
exclusively" for work purposes (which applies in both cases).
No. Allowability or otherwise of travel expenses is specifically defined
for employed people. The usual "wholly, exclusively and necessarily" stuff
is not applicable.
Assuming, if we may, that "necessarily" would not be a stumbling block,
the question of his SE status is completely irrelevant.

What is important is the question of his "home base". Travel between
home and work is commuting and is not allowable, irrespective of whether
you're employed or self-employed. The question is where "work" starts.
If he keeps an office at home, which acts as his base of operations,
then his "commute" ends when he walks from his breakfast table into
this office. Work starts there, and travel to the first client site
is then work travel, and allowable. If he does not have an operations
base other than client sites, then travel from home to the first client
site would be private travel, and not allowable; only travel between
client sites would be allowable.
But this is not the case if he was employed. So establishing s/e status is
important.
 
R

Ronald Raygun

Martin said:
No. Allowability or otherwise of travel expenses is specifically defined
for employed people. The usual "wholly, exclusively and necessarily"
stuff is not applicable.
Surely the fact that travel between home and place of work ("commuting")
for employees is disallowed is a *consequence* of the fact that commuting
is held to be an activity which fails to meet the "Wh, ex, & nesc" tests.
So even if commuting were not specifically disallowed by statute (and
I'll take your word for it that it is), it would *still* be disallowed.
In effect, that bit of statute is unnecessary.
But this is not the case if he was employed. So establishing s/e status
is important.
Why is it not the case? An employee might be instructed to work from home,
and his home would then become his main place of work.
 
M

Martin

Ronald Raygun said:
Surely the fact that travel between home and place of work ("commuting")
for employees is disallowed is a *consequence* of the fact that commuting
is held to be an activity which fails to meet the "Wh, ex, & nesc" tests.
So even if commuting were not specifically disallowed by statute (and
I'll take your word for it that it is), it would *still* be disallowed.
In effect, that bit of statute is unnecessary.

Please see below...
Why is it not the case? An employee might be instructed to work from
home,
and his home would then become his main place of work.
Home may very well be his NPW - though not simply by virtue of being
instructed to work from home.

The "wh, ex & nec" doubtless were factors in deciding which travel (for
employees) is allowable and which not. But there are so many "grey" areas
(aka attempts to get round the rules... :)) that a very detailed "rule
book" has been built up. It deals with stuff like ... what if journey from
home to temp place of work (i.e. non-NPW) takes you past your NPW. How much
is allowable? What if you stop for a pee at NPW, en route to non-NPW? What
if you stop for an hour to check emails, talk to the boss, etc. What if
home to non-NPW is shorter than normal commute to NPW? Is any of that
allowable? I haven't the references to hand - but I've had cause to examine
these from time to time and (perhaps like others here) was quite surprised
at how much is set out in black and white.

This contrasts with s/e travel, where there seems more based on case law
than on statute.

In passing, very many employers base their own travel-reimbursement policies
on the HMRC "allowability" and NPW rules. This actually makes life easier
for everyone. Imagine the fun if the SATR figures were wildly different
from the P11D figures each year!

Incidentally, the rules which define NPW vs temp work place (for employees)
are fairly well understood nowadays by anyone having to consider travel for
IR35 purposes (by which I mean all that 40%, 24 months etc stuff.)
 
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S

Simon

Ronald said:
Surely the fact that travel between home and place of work ("commuting")
for employees is disallowed is a *consequence* of the fact that commuting
is held to be an activity which fails to meet the "Wh, ex, & nesc" tests.
So even if commuting were not specifically disallowed by statute (and
I'll take your word for it that it is), it would *still* be disallowed.
In effect, that bit of statute is unnecessary.


Why is it not the case? An employee might be instructed to work from home,
and his home would then become his main place of work.
It seems to me that many are missing the point, its not whether ther are
wholly, exclusively or necessarily but it does have to be in the
performance of the duties. Travel to and from the normal place of work
is necessary as you cant work until you get there. it could be
exclusively because it is possible that the work could only be performed
there, but it was ruled that the travel only put them in a possition to
work but was not in the performance of the duties.

I tried the original OP's mission, to seach the HMRC site for assistance
for a S/E person but all that comes up are the old SE Manuals and the
current EIM which all relate to an Employed persons expenses. Not very
helpful.

So if the manuals dont help, what the legislation. Self Employed income
is taxable by virtue of Income Tax (Trading and Other Income) Act 2005.
Part 2, Chapter 4 34 (1)(a) makes reference to "expenses not incurred
wholly and exclusively for the purposes of the trade,....."

I would therefore suggsted that this would have a similar meaning to
S337 ITEPA 2003 so that Travel between home and a regular place of work
would not be considered "for the purposes of the trade" and therefore,
no deduction.

Well, thats my two penneth worth.

Simon
 

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