2 year rule versus limited company

[Integrity]

Originally Posted by ASB

There is another possible get out. If one has multiple clients and does "substantive work" at the home base they may be an argument that it remains a temporary workplace.
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Absolutely!

[NotAllThere]

If you shift from one brolly to another each contract, then there is a risk that none of the contracts will count as temporary.

Two possibilities occur to me:

1. If the contract is no longer financially viable, ask for a rate rise come renewal to cover the additional costs.

2. You currently live at A and commute weekly to B, where you spend more than 40% of your time. Rearrange your personal affairs, so that you now live at B, and, in order to do 1 or 2 hours each week, you commute weekly to A.

[jimeller]

Originally Posted by jimeller

ok guys, thanks for the response.

however, i may need to word this slightly different than before.

if i use a brolly company for 2 years, then start a ltd co, with a new contract (albeit the same terms and workplace), are my expenses counted against the new Ltd Co, as opposed to myself (whilst under the brolly)???

cos i'm new my posts are modded and this was was added to the middle of the thread. i'm bumping it to the top....

[blacjac]

Originally Posted by jimeller

ok guys, thanks for the response.

however, i may need to word this slightly different than before.

if i use a brolly company for 2 years, then start a ltd co, with a new contract (albeit the same terms and workplace), are my expenses counted against the new Ltd Co, as opposed to myself (whilst under the brolly)???

Sorry but you have misunderstood both expenses and the 2 year rule.

Expenses are personal and they apply to you. It is you reclaiming business costs from your employer.

The 2 year rule also applies to you. Changing your employer has no relevance on weather or not it is a temporary workplace (in the eyes of HMRC). In your scenario above, you would still loose the ability to claim expenses as soon as you know you will be at the same workplace for more than 2 years.

[TykeMerc]

Here's a question on the same general line.....

If you work for the same clientco, extended contract, but are periodically moved to different sites (geographically separate by 15-20 miles, not just visits, but where your main workplace physically is changed) where do you stand?
For that matter what if you're at the same end client, but supplied by different large suppliers (I was at one client for IBM, Unisys and Computacentre on 3 consecutive contracts)?

I've been close to the 2 year rule on several occasions and literally speaking over it on one occasion, but different site and different client, but part of the same group.

I've never really got to the bottom of this issue and I really should have.

[thunderlizard]

Originally Posted by TykeMerc

Here's a question on the same general line.....

If you work for the same clientco, extended contract, but are periodically moved to different sites (geographically separate by 15-20 miles, not just visits, but where your main workplace physically is changed) where do you stand?
For that matter what if you're at the same end client, but supplied by different large suppliers (I was at one client for IBM, Unisys and Computacentre on 3 consecutive contracts)?

I've been close to the 2 year rule on several occasions and literally speaking over it on one occasion, but different site and different client, but part of the same group.

I've never really got to the bottom of this issue and I really should have.

They both count as different, temporary workplaces. The important things are the person (you) and the place you go to (the site), as BlacJac says. The number or nature of companies involved in the relationship (consultancies, umbrellas, clients, whatever) don't matter.

[TykeMerc]

Cheers Thunderlizard, I thought that was pretty much the case, but it helps to get someone to confirm the view or tell me to stop being stupid

Thanks too NickFitz, good clarification.

[NickFitz]

Originally Posted by TykeMerc

Here's a question on the same general line.....

If you work for the same clientco, extended contract, but are periodically moved to different sites (geographically separate by 15-20 miles, not just visits, but where your main workplace physically is changed) where do you stand?
For that matter what if you're at the same end client, but supplied by different large suppliers (I was at one client for IBM, Unisys and Computacentre on 3 consecutive contracts)?

I've been close to the 2 year rule on several occasions and literally speaking over it on one occasion, but different site and different client, but part of the same group.

I've never really got to the bottom of this issue and I really should have.

The two year rule is about geography, not organisations. So if, for example, one travels from Manchester to the City of London to work for Client A for twenty-three months, and then accepts a contract with Client B, whose offices are also in the City a few hundred yards from Client A, Hector will argue that this is the same geographical place - the City of London.

I'm not certain how far this extends (would moving from the City to the West End count as "the same place", for example) but IIRC the criterion is that one is making substantially the same journey.

The thinking behind it is that if the business is operating in the same general area for more than two years (even though for different clients) then the business can be said to be normally operating in that area, and therefore an employee who works at that place of business is not travelling to a place other than their normal place of work. It is only the expense of travelling to a place other than your normal place of work that is deductible.

The fact that, as an employee of the business, you personally choose to live a long way away is irrelevant. The travelling you do from and to your home is considered to be your usual journey to and from work (even if you do some paperwork at home over the weekend), and it is therefore not "wholly and necessarily" for the purpose of working at a place other than the normal place of work, and thus is not deductible.

[Gonzo]

Originally Posted by NickFitz

I'm not certain how far this extends (would moving from the City to the West End count as "the same place", for example) but IIRC the criterion is that one is making substantially the same journey.

That is because HMRC do not specify any absolute limits. If the journey is essentially very similar, and in your example both are likely to require the same travelcard into Zone1, then that counts as one workplace.

But ISTR that they also give the example of working on two ends of an (unfinished) bridge across a river. The distance between the two points is very small, but because the bridge is not finished then the journey to them is very different and they wouldn't count as the same workplace.

I try to envisage myself attempting to convince someone face to face that what I claim is reasonable. If you don't think you can, then you probably shouldn't claim.

[NickFitz]

Originally Posted by Gonzo

But ISTR that they also give the example of working on two ends of an (unfinished) bridge across a river.

Typically useful guidance from HMRC

What if I tell them that despite being in the same office, I've gone from working on a server in a London co-lo to one in Manchester? Does that count as a different place