Travel Expenses abroad - claiming relief


F

fitlike2005

I have a question about claiming relief on travel expenses abroad.

I am working in the Netherlands through a Dutch management company. I'm
paying Dutch tax (with the 30% tax-free allowance) and UK social
security. I travel back to the UK every weekend and will also have to
fill in a UK self-assessment where the Dutch wages will be counted as a
tax credit.

I've assumed I can claim tax relief on the travel and accomodation
expenses (which would take my UK tax bill to less what I've already
paid in Holland). My UK based accountant says because my management
company is Dutch, this is not the case and my travel to and from
Holland cannot be claimed against tax. As I am working on short term
contracts (so my place of work would likely qualify as a "temporary
workplace"), I disagree with my accountants view. Anyone got any
experience with a similar situation?

M
 
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T

Troy Steadman

I've assumed I can claim tax relief on the travel and accomodation
expenses (which would take my UK tax bill to less what I've already
paid in Holland). My UK based accountant says because my management
company is Dutch, this is not the case and my travel to and from
Holland cannot be claimed against tax. As I am working on short term
contracts (so my place of work would likely qualify as a "temporary
workplace"), I disagree with my accountants view. Anyone got any
experience with a similar situation?
Nope but you can test your assertion that your 'place of work would
likely qualify as a "temporary workplace"' here:

http://www.inlandrevenue.gov.uk/manuals/eimanual/EIM32065.htm

The definition is surprisingly lax when someone has been in full time
employment for a long time in one place:

<quote>

An employee has worked for 5 years at her employer's head office in
Warrington. She is sent by her employer to perform duties at a branch
office in Wigan for 18 months. A deduction is available for the full
cost of her travel between home and the workplace in Wigan.

Although the period in Wigan is a period of continuous work, because it
is 40% or more of her working time (see EIM32080), that period does not
exceed 24 months and so Wigan is a temporary workplace.

</quote>

http://www.inlandrevenue.gov.uk/manuals/eimanual/EIM32081.htm


OTOH this might help you:

<quote>

An employee may attend a workplace regularly and perform duties there
that are not of limited duration without that workplace becoming a
permanent workplace, provided that the purpose of each visit is
temporary.

Where a visit is self-contained (that is, arranged for a particular
reason rather than as part of a series of visits to the same workplace
for the continuation of a particular task) it is likely to be for a
temporary purpose.

</quote>

http://www.inlandrevenue.gov.uk/manuals/eimanual/EIM32150.htm


--
 
M

Mike Lewis

Troy Steadman said:
Nope but you can test your assertion that your 'place of work would
likely qualify as a "temporary workplace"' here:

http://www.inlandrevenue.gov.uk/manuals/eimanual/EIM32065.htm

The definition is surprisingly lax when someone has been in full time
employment for a long time in one place:

<quote>

An employee has worked for 5 years at her employer's head office in
Warrington. She is sent by her employer to perform duties at a branch
office in Wigan for 18 months. A deduction is available for the full
cost of her travel between home and the workplace in Wigan.

Although the period in Wigan is a period of continuous work, because it
is 40% or more of her working time (see EIM32080), that period does not
exceed 24 months and so Wigan is a temporary workplace.

</quote>

http://www.inlandrevenue.gov.uk/manuals/eimanual/EIM32081.htm


OTOH this might help you:

<quote>

An employee may attend a workplace regularly and perform duties there
that are not of limited duration without that workplace becoming a
permanent workplace, provided that the purpose of each visit is
temporary.

Where a visit is self-contained (that is, arranged for a particular
reason rather than as part of a series of visits to the same workplace
for the continuation of a particular task) it is likely to be for a
temporary purpose.

</quote>

http://www.inlandrevenue.gov.uk/manuals/eimanual/EIM32150.htm
Yes but that's when the temporary place of work is somewhere different to
the 1st place. From what we are told there has, so far, only been one place
of work in relation to the employment by the Dutch management company, in
Holland. It sounds to me that, in relation to this employment, you have a
single permanent place of work. Now, if they sent you to work in Germany for
a few weeks then Germany would be a temporary place of work. Or if you had
been employed in the UK and then sent to work in Holland for a while then
Holland might then be temporary.

I agree with your accountant:-(
 
D

DoobieDo

mike-at- said:
"Troll Steadman" <trollsteadman@yahoo.co.uk> uttered more sh1te
which was snipped...

Most of us do likewise Mike.... except the Troll of course ;p
 
T

Troy Steadman

Mike Lewis said:
Yes but that's when the temporary place of work is somewhere different to
the 1st place.
Mike what "1st place"?
From what we are told there has, so far, only been one place
of work in relation to the employment by the Dutch management company, in
Holland.
Have we? Where? "I am working on short term contracts" he says.
It sounds to me that, in relation to this employment, you have a
single permanent place of work.
You? Or do you mean *me*? I'm not the OP.
Now, if they sent you to work in Germany for
a few weeks then Germany would be a temporary place of work. Or if you had
been employed in the UK and then sent to work in Holland for a while then
Holland might then be temporary.

I agree with your accountant:-(
I don't have an accountant, read the thread again.




--
 
J

Jonathan Bryce

Troy said:
Mike what "1st place"?
The main place of work
Have we? Where? "I am working on short term contracts" he says.
In which case, if he is working in Holland for the full duration of the
short term contract, then that is his main place of work.
 
F

fitlike2005

Mike,

Prior to this I was working on similar short term contracts working in
Manchester through an umbrella company. This was treated as a temporary
place of work and I could claim tax relief for all travel. I don't see
how this one differs, as far as I see it I have a single temporary
place of work as I'll be here for less than 24 months.

M
 
F

fitlike2005

It may be my "main" workplace but it is also my temporary workplace
according to E490 - "attendance for a limited duration" i.e. it is
possible to have only a temporary workplace.
 
T

Troy Steadman

It may be my "main" workplace but it is also my temporary workplace
according to E490 - "attendance for a limited duration" i.e. it is
possible to have only a temporary workplace.
You are right to pursue this. I don't know the answer, nobody here
probably knows the answer, perhaps there is no cut and dried answer, but
one thing is certain:

Too many Chartered Accountants have an "I don't want to get into
trouble with the IR so I'll surrender at once!" attitude.




--
 
S

Simon

Troy Steadman said:
You are right to pursue this. I don't know the answer, nobody here
probably knows the answer, perhaps there is no cut and dried answer, but
one thing is certain:

Too many Chartered Accountants have an "I don't want to get into
trouble with the IR so I'll surrender at once!" attitude.
I dont think its that Troy,

Until recently, the case was that the IR thought that if the employ,ment was
a fixed appointment, starting and finishing at a single location, then any
travel to or from that lcation was "Ordinary Commuting".

However, after an IR35 company took the IR on in this respect, it has been
decided that an employee or director of a service company can have the home
address as the permanent place of work and a series of temporary places of
work.

Does the OP have his own company or is he employed directly by the dutch
company. If he is, then this is likely to be treated as a single employment
at a single permanent place of employment and the travel would not be
allowed.

It is essential to have a permanent place of employment before you can have
a secondary or temporary place of work.
 
F

fitlike2005

Simon said:
It is essential to have a permanent place of employment before you can have
a secondary or temporary place of work.
In Section 3.18 of e490 it states:

"For travel on or before 5 April 1998, an employee could get tax relief
for travel to a temporary workplace only if he or she had a permanent
workplace to go back to after finishing at the temporary workplace. For
journeys made on or after 6 April 1998, an employee does not need to
have a permanent workplace to go back to in order to get tax relief for
travel to a temporary workplace."

There are also some examples given of people with only temporary
workplaces.
Also as far as IT is concerned Erica in section 3.16 (first 18 month
contract) is a good example.

My previous contract in Manchester was similar in nature to the current
Dutch one, I was working through an umbrella company and I didn't have
a permanent workplace. Full relief was given with blessing of the IR
(dispensation agreement).

M
 
T

Troy Steadman

Simon said:
I dont think its that Troy,

Until recently, the case was that the IR thought that if the employ,ment was
a fixed appointment, starting and finishing at a single location, then any
travel to or from that lcation was "Ordinary Commuting".

However, after an IR35 company took the IR on in this respect, it has been
decided that an employee or director of a service company can have the home
address as the permanent place of work and a series of temporary places of
work.

Does the OP have his own company or is he employed directly by the dutch
company. If he is, then this is likely to be treated as a single employment
at a single permanent place of employment and the travel would not be
allowed.

It is essential to have a permanent place of employment before you can have
a secondary or temporary place of work.
I guess so. For the OP here's perhaps the closest to his situation,
the agency accountant:

"An employee is an accounts clerk who gets all her work through an
employment agency. She rarely takes a job that lasts more than 2
weeks. She travels from home direct to the premises of the employment
agency's client. No deduction is due for her travel expenses between
home and client's premises.

"Each job is a separate contract of employment, see EIM32130. Each of
the client's premises is a permanent workplace because her attendance
at those premises will be for all of the period for which she will
hold that employment, see EIM32125".

http://www.inlandrevenue.gov.uk/manuals/eimanual/eim32131.htm
 
S

Simon

fitlike2005 said:
In Section 3.18 of e490 it states:

"For travel on or before 5 April 1998, an employee could get tax relief
for travel to a temporary workplace only if he or she had a permanent
workplace to go back to after finishing at the temporary workplace. For
journeys made on or after 6 April 1998, an employee does not need to
have a permanent workplace to go back to in order to get tax relief for
travel to a temporary workplace."
That was before 5/4/98

There are also some examples given of people with only temporary
workplaces.
Also as far as IT is concerned Erica in section 3.16 (first 18 month
contract) is a good example.

My previous contract in Manchester was similar in nature to the current
Dutch one, I was working through an umbrella company and I didn't have
a permanent workplace. Full relief was given with blessing of the IR
(dispensation agreement).
Are you still employed by the Umbrella contract in Manchester. I doubt it as
these have a shelf life of 18 months to the day and are folded up
uirrespective of the term of your engagement.

If not, then this is a seperate employment, of limited duration, based
abroad. Travel costs are not allowable.
 
F

fitlike2005

Simon,

I'm no longer employed by the UK umbrella company because they can't
operate in Holland. Are you saying the rules have changed since I last
worked in the UK? So say I found a 6 month contract in London, working
through an umbrella company - you are saying that tax relief for the
travel costs from home to London would no longer be allowable?

M
 
T

Troy Steadman

Before I get around to rebuking Ronald about his incorrect handling of
PYA's there is a taxman who needs a rebuke first. Clearly a specialist
area but this is equally clearly nonsense:

Simon said:
That was before 5/4/98
No it wasn't. 3.18 clearly says the exact opposite of what you and
every one else in this thread have been saying.

Let's have a look at Erica:

3.16: Example
Erica is employed as a computer consultant. She works full-time at a
site for 18 months developing a new computer system. The work is then
extended for another 18 months at the same workplace, for the roll-out
of the new computer system. The roll-out is subject to a separate
contract between the employer and client.

As long as Erica did not expect to be working on the site for more
than
24 months she is entitled to relief for the cost of travelling from
home to the site.

Once her employer enters into a new contract Erica expects to be
working on the
site for more than 24 months so from that point she is not entitled to
relief for her journey from home to the site.
 
R

Ronald Raygun

Troy said:
Before I get around to rebuking Ronald about his incorrect handling of
PYA's there is a taxman who needs a rebuke first.
Come on then, get a move on. I'm not going to wait around all year.
 
S

Simon

fitlike2005 said:
Simon,

I'm no longer employed by the UK umbrella company because they can't
operate in Holland. Are you saying the rules have changed since I last
worked in the UK? So say I found a 6 month contract in London, working
through an umbrella company - you are saying that tax relief for the
travel costs from home to London would no longer be allowable?

M

The rules last changed in this on 5 April 1998.

One thing that is being confused is that you place of work does not carry
from one employment to the next.

The engagement in Manchester was one employment. The ductch contract is
another seperate and distinct employment, not just another contract.

If you returned and was employed by another umbrella company, that would be
a third employment.

Each employment would have a place of employment. If there is only one place
of employment during the life of or the majority of the employment, that is
not a temporary workplace and travel to and from that place is not
allowable.
 
S

Simon

Before I get around to rebuking Ronald about his incorrect handling of
PYA's there is a taxman who needs a rebuke first. Clearly a specialist
area but this is equally clearly nonsense:



No it wasn't. 3.18 clearly says the exact opposite of what you and
every one else in this thread have been saying.


Let's have a look at Erica:

3.16: Example
Erica is employed as a computer consultant. She works full-time at a
site for 18 months developing a new computer system. The work is then
extended for another 18 months at the same workplace, for the roll-out
of the new computer system. The roll-out is subject to a separate
contract between the employer and client.

As long as Erica did not expect to be working on the site for more
than
24 months she is entitled to relief for the cost of travelling from
home to the site.

Once her employer enters into a new contract Erica expects to be
working on the
site for more than 24 months so from that point she is not entitled to
relief for her journey from home to the site.
Just so you can get on with Ronald, and he is clearly getting impatient, I
think that the OP is a little less Erica and a bit more Everton at 3.19.

I was not thinking of going back to Elderkin v Hindmarsh, mores the pity,
but the OP is not working through his own company and working on seperate
contracts, that is a whole different story. He is taking on different
contracts through different employers so each has to be treated seperately.

OK, its Ronalds turn now.
 
F

fitlike2005

So what is the difference between Erica and Everton? From what I can
see Erica was taken on for doing a particular task or project (expected
to last 18 months) while Everton is on a fixed term contract.

My Contract states the following "The contract of employment is entered
into for the duration of the following project" followed by name of
project, starting date and expected termination date.

Does the above clause make any difference?

M
 
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F

fitlike2005

Still trying to work out if I'm more an Erica or an Everton.

My original contract was for 2 months. It was then extended for 4
months. There wasn't a separate new contract entered into, it is
titled: " Consultancy Agreement dated dd/mm/yyyy - Extension". They
want to extend it for another 6 months in 2 weeks time which is why I'm
in a bit of a hurry to work this out.

Do these extensions (as opposed to new contracts) make it a
non-fixed-term appointment? i.e. I'm more an Erica than an Everton?

M
 

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