Something I came across today

UK PROFESSIONAL DRIVERS FORUMS THE UK PROFESSIONAL DRIVERS FORUM (INTERACTIVE)
1

THIS REQUIRES A CHAT WITH THE INLAND REVENUE AS IT IS A COMPLICATED AREA OF INCOME TAX.
To cut a very long story a bit shorter, as some of you know, I am a self employed driver as well as driving on PAYE through agencies. Anyway, today I’m filling in my Self Assesment form for my Self Employed driving I do and I get to the Employment section which I need to fill in for the agency work I’ve done. So I’m going through it and I come to the section for “Expenses you incurred in doing your job” and the entry for Travel and Subsistence Costs.

Looking through the notes on the employment section it says that you can deduct the expenses of travelling on a business journey and defines a business journey (ones I can claim for) as “A journey you make to and from a workplace you have to attend to carry out the duties of your employment - but not if the journey is ordinary commuting or private travel”.

Going further, it defines Commuting as " travel between your home and a PERMANENT place of work. It defines a permanent place of work as a workplace you go to regularly which is not a temporary workplace.

Hmmm…interesting. Already the cogs are starting to turn.

Now as an agency driver, you know that you’re never at any place for very long so you don’t actually travel to the same place all the time to go to work. In other words, you don’t commute to the same place all the time. However sometimes you can go to a place for a few months at a time. So I looked at the notes for what it says about Temporary Workplace and here’s where it gets interesting.

A temporary workplace is a place you go to to carry out a task of limited duration or for some other temporary purpose. Sound familiar? Certainly sounds like agency work to me. To continue…You are entitled to a deduction for the cost of travelling between your home and a temporary workplace you have to go to, to carry out your duties.

A workplace is definied as temporary as long as it is not for more than 24 months or for the total period of your employment if under 24 months. In other words, as long as you don’t stay at the same place for the entire time you’re at the agency, it counts as a temporary place of work.

So I phones the Inland Revenue to enquire about this and get told I’ll get a phone call back within 20 minutes as it has to go to a “technical advisor”. SIX HOURS LATER I finally get a phone call. I guess they’ve had to do some head scratching.

(As I said, IT IS A GREY AREA and you should confirm it for yourself, preferably in writing)

“Yes Mr. Turton, we can CONFIRM that indeed the companies the agency send you to IS classed as a temporary workplace and you ARE allowed to claim travel as an expense as long as the agency don’t reimburse you”. :smiley::D:D:D:D:D:D:D:

Well I don’t know about you but I’ve never been paid by the agency to drive from my home to where they send me.

So what does it mean? As long as the agency do not pay you anything from travelling from your home to where they send you, it means that for the first 10,000 miles travelling to work for the agency you can claim 40p per mile and 25p per mile above 10,000 miles. It does mean a bit of effort on your part though. You WILL have to keep records and either register for Self Assessment (You’ll only need to fill in a few pages in the whole document) or file a claim for a tax refund with the Tax Office every year.

And the savings? For example if you travel 10,000 miles a year going to jobs for the agency, you can claim 10,000 x 40p = £4000 deduction. THIS WILL REDUCE YOUR TAX BILL BY £880 just for 10,000 miles. In other words, the taxman will put £880 in your pocket for doing nothing more than driving to work!! :smiley: :smiley:

Now I claim Working Tax Credits so armed with this decision from the Inland Revenue, I phoned WTC up. Upshot is that I was able to reduce what I told them I earned as gross pay from the agency in 2005-2006 by the amount I was claiming for Travel Expenses. As the WTC people reduce what the payout is by 37p in the £ for every £ you earn over a certain limit, it effectively means that 10,000 miles is now worth an extra £1480 in Tax Credits (£4000 x £0.37)

All in all if you travel 10,000 miles a year to and from jobs the agency send you to, it could potentially be worth up to £2360 IN YOUR HAND every year just for keeping a record and filling in a form once a year. If, like me, you keep a diary to keep track of what you’ve done, it is easy to do.

AS I SAID PLEASE DO VERIFY THIS FOR YOURSELF WITH THE INLAND REVENUE AS PEOPLES SITUATIONS VARY

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That is interesting as this link seems to contradict that. I suppose the deciding factor is whether or not “Section 44 ITEPA 2003 applies” and from my brief searching just now I can’t work it out definitively although I suspect it does apply and therefore he information you have been given is duff. I suggest you get it in writing.

Of course I’m not an accountant or tax inspector and so I could well be wrong!

Paul

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Well this was direct from the tax inspectors, not just the frontline helpdesk. It’s taken a long time to resolve this this afternoon and I know that when I was rung back for the final time and talking to someone senior for the thick end of an hour, with long periods of time spent listening to Greensleeves as they checked things, they did say that it was a complicated area and due to the time taken inbetween phone calls, I can only assume that they looked into it from every avenue.

I’ve amended my post to tell people to ring the Inland Revenue to check for themselves.

4

What a tax inspector tells you over the phone and what they decide during a tax investigation, are usually two different things! They change their minds more often than their underpants!

Trust me, I know this from experience!

One bit of advice I would give when dealing with them is to make notes of all conversations together with details of who you spoke to, dates, times etc.

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LOL. THanks for the heads up. THe money is going to be put to one side just in case. If I don’t hear anything for 12 months, I’ll assume all OK. I don;t run the business down to the bone anyway so there’ll always be the funds available to repay it.

Anyway, I’ve finished with agency work for now due to being screwed so am solely Self Employed which makes life easier.

6

:confused: As far as I know, this how Nova and alike deal with travelling expenses. You claim it even though its temporary. I am on Nova and clain for my work travelling expenses

And anyway, know any agency drivers with a permanent place of work ? :smiling_imp:

Correct me if I am wrong but, according to the tax man, you can only do temporary work, be on a ltd company, and claim expenses for travel. So all places of work are temporary :confused: :confused:

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Conor:
you can claim 40p per mile and 25p per mile above 10,000 miles.

Further to Conor’s excellent information i should be pointed out it doesn’t just apply to cars, for those who use a motorbike instead of a car the rate is 24 ppm, for all business mileage, no different rate after 10,000 miles.

And get this, if you cycle you can claim 20 ppm for all business mileage. :open_mouth: :open_mouth: :open_mouth: That’s a lot of pairs of lycra shorts and those stick on extra calf muscles the cyclists seem to wear. :wink: :smiley: :smiley:

If the amount claimed is less than £2500 you don’t need a self assessment form, instead you use form P87

My wife is a carer using her car to travel between each clients house and she claims her mileage on form P87, as do all the other carers in the company she works for. It is a simple process and she has never had a problem with the revenue on this issue, probably because the local tax office know the company and are used to receiving claims from the carers who work for them. She does keep a diary where she jots down the daily milage just in case they ask questions.

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I’m not usually slow off the mark with things so I don’t know why I didn’t pick up on it last year but what it does do is get me to thinking about how many agency drivers not on NOVA etc are entitled and not claiming.

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DAFMAD:
:? As far as I know, this how Nova and alike deal with travelling expenses. You claim it even though its temporary. I am on Nova and clain for my work travelling expenses

No, NOVA is a different thing altogether. Your NOVA company is what is known as a “Personal Service Company” and the HMR&C take on that for the purposes of Mileage Allowance Relief can be found here.

Working for a personal service company and working for an agency seem to be considered quite different for these purposes (at least that’s my translation of the information HMR&C have put online).

Paul