24 month rule and getting extension to run just short of it

[psychocandy]

Yes know the rules. Once you know, that it no more expenses.

My first contract was, for some reason, 3 months and 1 week. Then theres been 3 months at a time up until now - 21 months. So next 3 months will take me OVER 24 months.

Aware that massaging things to prevent this is probably frowned upon by HMRC.

So I had a word with client, who I get on very well with. Explained the 24 month rule and said, look, off the record, an extension for 2 months and 2 weeks would be ideal. I could then claim expenses right up to - they agreed to this.

But its gone off to head office and agency and today offer has come back - 3 months. Don't know yet whether this is clientco head office saying no cant be doing all that messing around its 3 months, or agency.

Either way I would say since its been offered, it would look not good if they backtracked and amended it.

Not a huge amount of money, but its probably going to cost me £400-£500 in expenses I now can't claim and will be paying CT on.

Anyone ever been in similar situation?

[malvolio]

You lose. The expectation is that you will get a renewal therefore the artificial short-term contract won't satisfy the rules. In fact, you should already have stopped claiming since you wouldn't be negotiating if you didn't expected to be renewed.

[northernladuk]

So let me get this straight.. You've asked your client to lop off around £400*10 days = £4000 off your renewal just so you can claim expenses??

Anyone else been in this situation? Where a client won't bugger about just to suit your tax situation?

[MrMarkyMark]

So let me get this straight.. You've asked your client to lop off around £400*10 days = £4000 off your renewal just so you can claim expenses??

But.....its gonna cost him £400-500 in expenses

[northernladuk]

Yes know the rules. Once you know, that it no more expenses.

Obviously you don't.

What is the 24 Month Rule? - Contractor Weekly

However if during the 24-month period it becomes apparent that the engagement will exceed 24 months then at this time expenses are no longer claimable.

until you have reason to believe your contract may last over 24 months.

https://www.gov.uk/government/public...m-6-april-2016

•goes to the same workplace in the course of a period of continuous work which lasts or is likely to last more than 24 months, or

None of the guides say no. They use the terms as you can see above. As you are BAU with no project deliverables you could argue the expectation should be there from the first day let alone this situation where you know it will so you are trying to bend the rules.

IF and that's a big IF you can change milestones of a project to suit then you move from in the tulip to rocky ground... But a BAU bod changing days to suit a tax rule. Not a chance.

[psychocandy]

You lose. The expectation is that you will get a renewal therefore the artificial short-term contract won't satisfy the rules. In fact, you should already have stopped claiming since you wouldn't be negotiating if you didn't expected to be renewed.

I think I do in this case I must admit. Not sure I agree with the "expecting a renewal" argument.

You could argue that after a year, you could expect to recieve extensions after this over 24 months. But in reality you cant expect anything.

I've been offered extensions verbally int he past that have then been vetoed by head office and didnt happen.

Sorry in my book, I can't expect to be somewhere until the contract is offered.

[Hobosapien]

Depends on your appetite for risk. This is one of those things that will only come to light if HMRC ever do a thorough investigation into your expenses.

I've had such an investigation years ago (so their approach may have since changed) and IIRC they didn't even want to check the contract terms or start/end/renewal dates as regards the 24 month rule. They just wanted breakdown of the expenses figure for mileage, accommodation, PIE, to make sure it looked legit, then moved onto pension contributions, then got bored after about 6 months of letters to and fro and said I owed them nothing.

Not sure the worry is worth it for a few months of expenses. They are like a dog with a bone if they think you're hiding something, whether you are or not.

[psychocandy]

So let me get this straight.. You've asked your client to lop off around £400*10 days = £4000 off your renewal just so you can claim expenses??

Anyone else been in this situation? Where a client won't bugger about just to suit your tax situation?

Makes no odds to the client. Come November they're either going to want me to stay over xmas or not - two weeks isnt going to matter.

Also, as you know, just because the contract says end of november they could get rid of me end octrober if they so desired.

[northernladuk]

I think I do in this case I must admit. Not sure I agree with the "expecting a renewal" argument.

Well you should.. How can...

So I had a word with client, who I get on very well with. Explained the 24 month rule and said, look, off the record, an extension for 2 months and 2 weeks would be ideal. I could then claim expenses right up to - they agreed to this.

Not be anything but expecting a renewal which is Mal's point.

[psychocandy]

Obviously you don't.

What is the 24 Month Rule? - Contractor Weekly


https://www.gov.uk/government/public...m-6-april-2016


None of the guides say no. They use the terms as you can see above. As you are BAU with no project deliverables you could argue the expectation should be there from the first day let alone this situation where you know it will so you are trying to bend the rules.

IF and that's a big IF you can change milestones of a project to suit then you move from in the tulip to rocky ground... But a BAU bod changing days to suit a tax rule. Not a chance.

What a load of tosh. So anyone who starts a BAU rule shouldnt claim because they'll be there more than two years. Heard it all now.

You do know that some companies get BAU people in to cover permies for things like maternity leave, permies seconded to other depts for a few months etc? These sort of gigs they know up front how long they want you.

Also, I do BAU and project work not just BAU.