Looking at contracting and split locations

[Astaroth]

Have been offered an 18 month contractor contract and am seriously considering taking it as the day rate is great and can certainly get a daily replacement for myself at a much lower rate :D

The one thing I am uncertain of is the expenses element as the contract would be split between London and Manchester (2 days in each and the 5th to be spent where I want). How does that work in terms of expenses? Can the commute between the two be claimed and/ or the over night accomodation in Manchester?

I remember from my employed life that you cannot claim for commuting to your perminent place of work but dont know how that translate when it is a contract not perminent and you have two places of work.

[Astaroth]

Or does your home/ registered office count as your perminant place of work and therefore you can claim travel to both?

[Homshaw]

My understanding is that if the expectation is that the contract is for less than two years it will not be regarded as a permanent place of work. If at any point it becomes apparent it will be longer than two years it immediately becomes a permanent place of work and would not be claimable

[Astaroth]

But which one would? or are both?

[Homshaw]

http://www.hmrc.gov.uk/helpsheets/490.pdf

Apparently there is a 40% rule as well

[Homshaw]

I think you should be OK for both but welcome other opinions

[MrPAYE]

Just to clarify: the guidance in 490, and all the legislation around permanent/temporary workplaces, is in connection with employment under PAYE.

My understanding Astaroth is that you are going to be doing this as a self employed contractor ? If this is the case then you do not come under the legislation referred to.

I am sure there will be more informed people than me on the self employed tax side, but I am sure that all travel to/from both London and Manchester would qualify for relief under the self employment tax rules.

As an aside, even if you were under PAYE, you would still qualify for tax relief for both journeys on the basis that the contract is for less than 24 months (and assuming there is no other underlying reason why the exemption wouldn't apply in your case).

Regards

MrPAYE

[MrPAYE]

http://www.hmrc.gov.uk/helpsheets/490.pdf

Apparently there is a 40% rule as well

Just to clarify this point (in relation to PAYE employments), the 40% rule only comes into play when the duration at a particular location exceeds th 2 years.

There are other points to consider which may render a place to be a permanent workplace even if less than 40% of the time is spent there- but I won't bore you with the details...