Q. I am a contractor who lives in Birmingham and has been working in London for a number of years (4 years to be exact). My accountant advised me to stop claiming travel & accomodation expenses once it became apparent that I was going to be in London for more than 24 months. Is this correct even if I have changed clients on a number of occasions and they have had separate locations in London (e.g. Bishopsgate, St. Pauls and Canary Wharf)?
A. Your accountant is correct.
An employee’s workplace may change without significantly affecting their journey to work. The basic principle is that a change in the location or boundaries of a workplace will give rise to a new workplace where the change has a significant effect on:
- the journey an employee has to make to get to work, and in particular
- the cost of that journey
Where the above criteria are met then the new location is a new workplace even if it is close to the old workplace. If however you have been using the tube to travel to these workplaces then, Liverpool St., St Pauls & Canary Wharf aren’t that far apart & whilst there are additional stops involved, no extra cost is likely to have been incurred. In these circumstances. HMRC apply the ‘modification rule’ & there can be no new workplace.
Say you had several concurrent contracts with the same client exceeding 24 months and consequently stopped claiming Travel Expenses. Then the client moved offices and it had a significant effect on the cost of your journey.
Would this reset the 24 month rule and you could claim expenses again, even though you had been with the client for over 24 months?
Yes this certainly could reset the 24 month rule. Specifically this is set out in section 4.6 (pg 27) of booklet 490 regarding Travelling Expenses.
As indicated in the example question above if the change in location has a significant effect on the journey and the cost of the journey then that location could be classed as a new location.