Mileage expenses - home worker
Discussion
In a new role I have inherited an employee who works from home, but is in "the office" twice a week, every week. They have been claiming this on expenses as business mileage. Are there any situations where this is acceptable? I understand it would be dubious from a tax POV for both the business and the employee.
Turns out, regardless of what the contract says about place of work, this wouldn't be an allowable expense;
Travel expenses: travel for necessary attendance: definitions: permanent workplace: regular attendance
Section 339(2) ITEPA 2003An employee regularly attends a particular workplace if the attendance is frequent, or it follows a pattern, or if the place is one at which the employee usually attends for all or almost all of the period for which he or she holds, or is likely to hold, that employment.
The proportion of an employee’s working time spent at a particular workplace is a factor in determining whether or not it is treated as a permanent workplace but it is not the only factor. Even if the employee attends the workplace only on one or two days a week, if it is on a regular basis, the workplace may still be a permanent workplace.
Apparently whilst it's only been 6 months or so that this has been regular (2 days a week), the employee has always had "the office" as their place of work in their contract and has always claimed mileage when travelling there. Where's the best place for them to get advice on their tax position, I expect HMRC could come after them for unpaid tax going back several years should they want to, however unlikely.
Travel expenses: travel for necessary attendance: definitions: permanent workplace: regular attendance
Section 339(2) ITEPA 2003An employee regularly attends a particular workplace if the attendance is frequent, or it follows a pattern, or if the place is one at which the employee usually attends for all or almost all of the period for which he or she holds, or is likely to hold, that employment.
The proportion of an employee’s working time spent at a particular workplace is a factor in determining whether or not it is treated as a permanent workplace but it is not the only factor. Even if the employee attends the workplace only on one or two days a week, if it is on a regular basis, the workplace may still be a permanent workplace.
Apparently whilst it's only been 6 months or so that this has been regular (2 days a week), the employee has always had "the office" as their place of work in their contract and has always claimed mileage when travelling there. Where's the best place for them to get advice on their tax position, I expect HMRC could come after them for unpaid tax going back several years should they want to, however unlikely.
andy-xr said:
I get the feeling that people management is something that's been put on you rather than something you've developed in to.
Consider it from the employees side as well. They're being pulled into the office so would consider this a company request. Company requests presence has usually meant company pays the fuel bill. Company doesnt pay fuel bill gives the employee two choices, either pick it up themselves or not go to office.
They might be happy and completely understand the position. But if you just go straight in with no plan B you're going to come away from it worse off in the long run. Unless you already had a plan and havent included the details of that of course.
With respect, I came here asking for advice on the legal/tax implications of the situation, not on how to manage my employee, that element I am more than comfortable with.Consider it from the employees side as well. They're being pulled into the office so would consider this a company request. Company requests presence has usually meant company pays the fuel bill. Company doesnt pay fuel bill gives the employee two choices, either pick it up themselves or not go to office.
They might be happy and completely understand the position. But if you just go straight in with no plan B you're going to come away from it worse off in the long run. Unless you already had a plan and havent included the details of that of course.
PorkInsider said:
Isn't the issue more that if expenses are (and have been) claimed for the mileage, then there are is a tax liability here?
It doesn't matter whether the employer minds the employee charging them for the mileage, if it's not an allowable expense then it is simply extra taxable income.
Or is that not correct?
Precisely.It doesn't matter whether the employer minds the employee charging them for the mileage, if it's not an allowable expense then it is simply extra taxable income.
Or is that not correct?
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