Mileage and Subsistence expenses

D12345

Registered User
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6
Hi folks,

I am a self employed engineering contractor. I have recently taken a new contract role with a company that is designing and building a new plant. I consider my 'normal place of work' to be the site where the new plant is being built, this is where my office is located. During the initial design phase (~6 months), I will be spending 2-4 days a week in an engineering firm's office attending meetings etc.

Am I entitled to claim mileage and subsistence expenses from the site (normal place of work) to the engineering firms offices? My accountant has referred me to IT54 and it is all good.

I just want validation from others that what I am doing is ok. I should qualify this by saying that I have already been subjected to a revenue audit as part of the revenue contractors project which did not end very well for me.

I would appreciate any comments as I do not want to fall foul of the revenue when they come calling again in a few years time with their interpretation of the rules.
 
Do you agree with your accountant's interpretation? Is there any particular aspect upon which you have concerns?
 
Do you agree with your accountant's interpretation? Is there any particular aspect upon which you have concerns?

My concern would be the revenue coming back saying that their interpretation is that the engineering firm is your normal place of work for the first number of months due to the fact that I am spending the majority of my time at that particular office and then disallowing all expenses claimed. Again

I have been down this road already and a single employee limited company versus the revenue. I wonder who is going to win out? I would prefer not to claim any expenses than be subjected to another few months of a revenue audit which was not a pleasant experience.

My accountant has given me advice as he did in the past but at the end of the day, the revenue penalties and interest will be coming out of my pocket.

Hence why I would like to hear other opinions.
 
Why not ask Revenue? I'm not sure if they'd provide an answer in this situation, but I asked for their view on VAT rates for items we're selling as the information to hand was ambiguous and we were getting different answers depending who we spoke to. I asked Revenue, and they provided an answer by email. Like you, I was more interested in getting it right rather than trying to push the boundaries in any sense, but having got their interpretation in writing I feel we're now covered, should we be audited. As I say, I'm not sure they'd do the same in your situation, but no harm in asking I would have thought?
 
I am a self employed engineering contractor. I have recently taken a new contract role with a company that is designing and building a new plant.

I consider my 'normal place of work' to be the site where the new plant is being built, this is where my office is located. During the initial design phase (~6 months), I will be spending 2-4 days a week in an engineering firm's office attending meetings etc.

So the contract is with the designers. You will be spending 2-4 days in their offices! Does this not make their offices your base for the initial phase?

Then when construction starts your base moves? Perhaps the advice to contact Revenue is the best your going to get.
 
No my contract is with the client who is the end user. My office is at the clients site. The AE (architect/engineer) firm is sub-contracted to design and build the new facility.
 
Assuming that you are a limited company this is a relatively easy question to answer.

Your normal place of work is the place where the new contract role is situated and the new plant is built and where you have your "office" (A). Then, you are required to move to a temporary location for 2-4 days a week as part of this contract that you have, to an engineering firms office (B). You are required to go there in order to fulfil your part of the contract.

The 1st journey from your home to where the new contract role (A) is situated is not a business journey and the expenses incurred cannot be paid to you gross without deduction of payroll taxes. However the 2nd journey to the engineers office (B) is a business journey and expenses incurred may be reimbursed to you tax free at the lower of the distance from your home to (B) or from (A) to (B).

This closely follows an example that has already been given by the revenue. IT54 applies to the 2nd journey and is not within the scope of contractor project. The revenue contractors project would apply to the first journey.

Your accountant is spot on and you probably should trust him more.

capnhand
 
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Hi D12345,

I also agree with your accountant, using The Revenue logic, the End User client location is your Normal Place of Work and you can claim expenses tax free for travel to other locations for business purposes as you have outlined. In simple terms the Revenue consider you as equivalent to an employee of the End User, who would be allowed travel expenses to go to an engineers office or other location for business purposes.

You could if you wish send an email to your local Revenue office and get them to confirm this. Check the Revenue website for the appropriate email address.

If it was me, then yes I would claim these expenses tax free. Mainly because the total amount of expenses if only lasting for a couple of months will in all probability be a low percentage of turnover.
I am also going through the endless audit process with the Revenue. My learning's from this is that if you do claim legitimate expenses, then you also need to be prepared to defend your position if the revenue come questioning this in future, i.e. Appeal any revenue assessment if this situation was to occur. Though in fairness I would also estimate how much expenses would be involved, i.e. taking a contract where a lot of travel is involved creates a certain amount of risk as your expenses would be high.
 
Thank you for your replies. I agree with you fearbeag re being prepared to defend the position when the revenue come questioning in the future. That is the unknown piece and the piece that worries me a little.
 
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