This is due to the over-arching employment contract with your umbrella company that deems your home to be your permanent work place and the client’s place of work your temporary work place. You are therefore able to claim travel expenses to and from your temporary work place. There are two types of expenses – chargeable and non-chargeable.
Your non-chargeable expenses are processed as a tax benefit and help reduce your tax liability. They are offset against your taxable pay and you receive part of the cost back, according to the tax rate applied to your income. As mentioned previously, it is incredibly important that you retain receipts for everything that you claim. If you are investigated and you do not have receipts to support your claims, you will find yourself in a lot of trouble.
A workplace is deemed as a temporary site providing your attendance lasts no longer than 24 months. When we talk about expenses in general, we’re referring to running costs. For the most part, you will not be able to deduct unreimbursed travel expenses. Since many of the new tax law changes favor businesses, now may be a good time to form your own company if you have any aspirations to do so. For many freelancers, contractors and otherwise self-employed individuals, travel is a part of everyday life. If you are working self employed, the rules are more complicated. So how do you claim tax relief on car-related expenses? Getting from one workplace to another in the course of your business or profession when you are traveling within the city or general area that is your tax home. Transportation expenses do not include expenses you have while traveling away from home overnight. Daily transportation expenses you incur while traveling from home to one or more regular places of business are generally nondeductible commuting expenses. A question we are frequently asked is what an independent contractor can claim against income. Even if you use your car for business purposes while you are commuting, you cannot deduct the car expenses for your business. Here’s an example, assuming your home isn’t your principal place of business. By claiming all appropriate allowances and exemptions you can minimise your tax bill; however, this is not a way of avoiding tax. The cost of hotel or bed and breakfast accommodation can be claimed as an expense as can the reasonable cost of additional meals taken in conjunction with overnight accommodation. The cost of protective clothing that is worn to protect your everyday clothes can be claimed as an expense.
If you meet the conditions, you are likely eligible to claim travel and subsistence expenses. When it comes to contract extensions, timings can be crucial. The rules apply to locations, not clients, so a change in location can mean some travel is allowable, others not. You might not be constantly travelling to a particular site during these two years.