Tax Relief when employees work at different office locations
Different regular office Locations
One of our customers has been told by the Inland Revenue that an employee who has several different places of work that he travels to regularly, cannot claim mileage for traveling to any of these locations as these journeys are considered as normal commuting to his regular place of work i.e. if they paid him mileage on these journeys, this could not be treated as travel & subsistence but would have to be treated as benefits to be added to the employee's P11d.
This unfortunately is one of those grey areas.
We have studied the Tax Guides on this and find it unclear, but as this customer has a ruling from the tax office, our advice is that they have no choice but to obey it.
"It is usually clear whether or not a place is an employee's permanent workplace (and, therefore, whether a journey to that place is ordinary commuting). A place where an employee works is a permanent workplace if he or she attends it regularly for the performance of the duties of the employment. But it will not be a permanent workplace if it is a temporary workplace. A temporary workplace is somewhere the employee goes only to perform a task of limited duration or for a temporary purpose."
- Section 3.9 of 490 Tax Guide
The question is: What does regular mean?
We would suggest the employee could name one of the places he visits as his main place of work, and then the other locations are business trips and hence claimable as normal expenses.
Different temporary office Locations
If our customer had declared that the employee had a head office and needed to work at several temporary office from time to time, the Inland Revenue response may have been different.
Now this is clear and not grey at all.
The term 'permanent workplace' is defined as a place that the employee 'regularly' attends. The permanent work place is considered as one end of the journey for ordinary commuting. The other end of the journey for ordinary commuting is the employee's home. Journeys between an employee's home and a place of work are not business journeys but ordinary commuting, no tax relief is allowed on these journeys.
Trips out of the normal workplace to a temporary workplace and from home to a temporary workplace and vice versa are considered business journeys, and full tax relief can be claimed on these journeys.
Example
An employee who normally drives 50 miles in a Southerly direction to work is required to make a 168 mile round trip North to visit a client. The employer will reimburse the cost of the 168 miles trip and the Inland Revenue will allow the full tax relief on this claim. Providing the claim is within the Inland Revenue limits.
Subsistence includes accommodation and food and drink costs whilst an employee is away from the permanent workplace. Subsistence expenditure is specifically treated as a product of business travel and is therefore treated as part of the cost of that travel.
The flexibility of expenses enables organisations to ask these sort of questions at the time of claim entry, meaning that employees do not need to have an in depth knowledge of 'different office' legislation and that your organisation receives the maximum tax relief. These kind of issues can also be addressed in your individual expenses company policy, built into the system, meaning less questions need answering by expense processors, and less time is spent investigating individual issues.
If you would like to find out more information on how expenses can help with your travel and subsistence issues, simply call the expenses team on 01522 881300 or click here . Any information Software Europe provides concerning deduction of tax is subject to the approval of your local VAT office. Your local VAT office contact details will be listed in the telephone book under HM Customs & Excise .
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Why Notts Sport chose expenses
Company Profile 
Notts Sport is an International Sales & Marketing Company who provides design advice and supply synthetic sports surfacing. Notts Sport has agents across Europe in France, Germany, Spain, Italy, Norway and the UK and also has agents in the USA. With a turnover of £3million, they have 23 employees and have been working in the industry since 1984.
What was the problem?
As the majority of Notts Sport staff are sales personnel traveling to client meetings there was a difficulty in chasing expense forms, inconsistency in filling in the forms and a distinct lack of VAT knowledge amongst employees leading to an abundance of problems for the finance department when processing claims.
Notts Sport needed to make improvements and were left with 5 options:
• Telling sales employees to get it right or not get paid
• Employing an additional member of staff to concentrate solely on employee expenses processing
• Design an in house spreadsheet system
• Look for an available piece of software that would fix the problem without breaking the bank.
• Continue with the current system, which was creating an unmanageable workload.
Why expenses?
Having reviewed the proposed options, Carl Pearce, Company Secretary, attended the Softworld exhibition in Birmingham and met Software Europe. expenses was selected because of it's simplicity and flexibility. Being web based meant that it was highly adaptable and could be used by employees at any time and from anywhere in the world. The system enabled Carl to obtain every piece of information he needed and Software Europe supported the company through full implementation. The system has now been in place since December 2002 and continues to provide all the information the organisation requires, whilst retaining the simple user-friendly design.
If you would like to find out more about how expenses can save your organisation time and money, simply call the expenses team on 01522 881300 or click here
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expenses Feature Enhancements
expenses is an incredibly flexible product providing organisations with a vast array of employee expense information, expenses calculates the VAT and P11D correctly and provides users with an easy to use web based system for entering their expense claims.
The focus of the Software Europe's expenses team is our current users and it is through our current client database that we are able to find the enhancements that provide the most value to our customers. Our helpdesk notes the areas of questions from our users, and we use these as areas to improve on.
At our recent 2005 user group meeting in Lincoln, Account Manager, Laura Jackson, outlined many of these new features and explained why they are of benefit to those considering implementation as well as those clients who are currently up and happily running with the system. These are some of these features:
Administration
The addition of an audit trail to the exported reports function. This allows the administrator to view the data that has been extracted from the program and view who has accessed that data. This is beneficial in the most part to companies that have more than one person responsible for processing and paying expenses.
Administrators now also have the ability to dictate the age of the claims that they will accept, for instance you may reject claims over 3 months old, you may also give a 'no older than' date, for example no claims dated before April the 5th .
To help manage the mileage better; you can now create a matrix of places that are visited regularly showing the mileage.
My Details
Claimants can now view and check their car details and authorisers under My Details. From here they can also register any changes that need to be made using an email link direct to their Administrator.
FAQ
We have added a FAQ's section to the front page and menu bar. This is built individually for each client by our helpdesk, who add questions and answers that have been raised by users to aid other users of the system.
Adding an Expense
User defined comment added to each claimable item. This allows each customer to tailor the entry screen more specifically for their users. We have found that some organisations users were confused on the entry of some items, this allows them to provide an explanation for each item.
Entering a FUEL item now automatically shows the mileage rate being claimed. e.g. if you pay 40p for the first 10,000 miles and 25p thereafter, it will show what you are entitled to at this time.
Emails
Emails are the basis of the communication chain which runs through out the product. We have made a number of changes to make related claims easy to identify. We now allow you to add the sender, and the claim total, to the email and there is also now the option to send email notification at every stage of the claims process not just when claims are submitted, approved and paid.
We have added an alternative to email's, a note, this will notify people when they log onto expenses any messages from the system.
If you have any questions regarding these new features, or about expenses seminars in your area, do not hesitate to call the expenses team on 01522 881300 or click here
expenses New website launch
Software Europe are very pleased to launch the new expenses website at www.expenses-software.com.
The new site has been built to provide expenses customers and all those involved with the employee expense process with a central point of contact and information.
The site includes:
- Extensive employee expense management information including Tax and VAT guidance
- Details on expenses and how it benefits current users
- Information on how to organise a free product trail
- The facts about expenses and how the extensive reporting features can save you money in real terms!
Our new website illustrates why you should be looking to incorporate an expense management tool in to your financial strategy:
- You will be able to manage your employee expenses effectively.
- You will reduce your administrative burden.
- You will be able to monitor and control your expenses spend.
- You will optimise your operational efficiency.
- You will be able to maximise your VAT recovery.
- Your will have a system that is unique to your organisations needs.
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