I have a client who is employed by a separate company and works self employed separately as a sole trader - the two are not connected
I am just addressing their mileage for them and have a concern
Sometimes when they go to their self employed clients they go direct from their home which is also their office, however sometimes they go to their self employed client from their place of employment
The mileage from home to client im happy with as home is their self employed office but i am hesitating about their mileage from place of employment to self employed client - especially as that mileage works out more than if they went to self employed client from their home.
Do i treat that mileage as it truely is - ie from place of employement to self employed client or do i treat it as if they have gone from home as that is their office??
As i say im unsure and because the true mileage works out to be more i want to get it right! dont want a slapped bottom from HMRC!!!
If the contract with the seperate company is open ended (basically disguised second employment) then it is reasonable to expect it to go over two years from the outset and in such instance the two year rule must be considered.
If the client spends more than 40% of their time at the one site for the seperate company and the contract duration is "expected to be" (need to emphasise that (#1)) more than two years then no mileage claim would be allowable (Its a seperate permenant workplace).
If the contract is for less than two years and there is no expectation of renewal of the contract, or the time at any one site is less than 40% of the total for that role then mileage would be allowable.
After considering the above, if mileage is allowable at all then you would claim the shorter of normal place of work to the client or home office to the client.
kind regards,
Shaun.
#1 its an anomally of the system that a site based worker who expects a contract from the outset to be more than two years cannot claim mileage at all even if they lose the role after 23 months.
Converseley someone who takes a 23 month contract with no expectation of renewal can claim mileage until they believe that their contract will go over 24 months. So, imagine the scenario where joe blogs takes a 23 month contract. at the end of month 22 it looks as though the project is not going to be completed on time so they are extended for 3 months.
All mileage claims would stop in that from the moment that they are approached about renewal (end of month 22) where if they had not been approached they would have been able to claim for month 23.
In this example employee A gets nothing even though they only worked for 23 months whilst employee B gets 22 months mileage even though they work for 26 months.
Noone said tyhat they system was fair!
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Not sure ive made myself clear so will try and explain better!!
I only deal with the mileage my client does for the self employed business they have
Most tims my client goes from home (which is their office) to the self employed client - all that mileage i put through as from home office to client and return journey
Recently my client has started going to self employed clients from the employment office ie they finsih their working day with employer and then leave from their to go to do self employed client
My client is a party planner so its a case of do the job .. no contract or on going work etc
I feel that the client shouldnt claim mileage from the employment location to the self employed clients especially as that means a higher mileage claim that if they went from home office ... i feel the client should claim the mileage as if they went from home office to self employed client...but the client is questionning me on it and im not 100% sure i am right ???
The client is also raising the question of what then happens when they tie journies for clients together ie they go from home to client a, client b is on way back to home office so they go to client b on way home ... they are sayin to me that if i apply my belief re the mileage when they go from employment to self employed place which means they are claiming less . then surely they can claim from home to client a to home, from home to client b and home .... and im saying i dont believe it works like that!!
Not sure ive made myself clear so will try and explain better!!
The way that it was written I read it that it was almost a second employment for someone else, sorry for any confusion.
I only deal with the mileage my client does for the self employed business they have Most times my client goes from home (which is their office) to the self employed client - all that mileage i put through as from home office to client and return journey
Recently my client has started going to self employed clients from the employment office ie they finsih their working day with employer and then leave from their to go to do self employed client
You would use the shorter of the journey from the home office or where they are situated with their employment.
My client is a party planner so its a case of do the job .. no contract or on going work etc
I feel that the client shouldnt claim mileage from the employment location to the self employed clients especially as that means a higher mileage claim that if they went from home office ... i feel the client should claim the mileage as if they went from home office to self employed client...but the client is questionning me on it and im not 100% sure i am right ???
Correct, see above.
The client is also raising the question of what then happens when they tie journies for clients together ie they go from home to client a, client b is on way back to home office so they go to client b on way home ... they are sayin to me that if i apply my belief re the mileage when they go from employment to self employed place which means they are claiming less . then surely they can claim from home to client a to home, from home to client b and home .... and im saying i dont believe it works like that!!
Your right, it doesn't. They are looking to claim more mileage than they actually do for business which is not correct and would actually constitute tax evasion.
Sorry about confusing you with the two year rules, I read the original post as though it was almost a second permanent role run on a self employed basis... On the bright side you may now need that info for another client. Every cloud has a silver lining and all that.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I did feel the client was throwing all their toys out their pram because i was rejecting their mileage book log which showed going from employment location to self employed
I didnt think it was right and thank you for confirming that i am right!!
sorry one last thing on mileage ... sometimes my client goes to see someone and then decide they dont want to use him or the party is cancelled etc
I put through the mileage for those trips - as in my view it was still business even though a job didnt come out of it - hewouldnt have gone to see them for anyother reason
I do always ask him in these cases to sending a closing email which states ie "further to my on site visit yesterday" and keep these in his mileage book so if need be it can be proved to HMRC that he did go and the potential client did not proceeded
yep, even the one's that don't result in sales are completely legitimate business expenditure as the journeys were incurred wholly, necessarily and exclusively for business purposes.
Thats a good idea over the emials. All that I've been getting mine to do is record in one short sentence the reason for every journey.
On a linked note I've found many clients prior to employing my services have been charging a meal with potential clients to the business. Almost came to fisty cuffs with one client who thought nothing of spending £100 plus on a meal several times a week when I added all of those back for the tax calculation! Needless to say that was one hefty adjustment.
Similar story on a lesser level with buying coffee's for clients (rather than giving coffee at their own premises which I treat differently).
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hope to see you posting on here lots more over the coming months.
We've got a good little community thats an excellent mix of bookkeepers and accountants to all levels (including Chartered and Chartered Certified) all of whome talk to each other as equals.
Its also been commented that being on here is like being in an extended office even though we're distributed all over the country. Thats just what some here need when as self employed bookkeepers many of us work alone with noone to run ideas past.
Hope to talk soon,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
