2 year rule

[helen7]

Hi,

Quick question.

My next contract will take me over 2 years at my current site.

However, I changed LTD companies 6 months ago. In this instance, did the 2 year rule start over from when I started with the new company?

Thanks

[Rookie]

Hi,

Quick question.

My next contract will take me over 2 years at my current site.

However, I changed LTD companies 6 months ago. In this instance, did the 2 year rule start over from when I started with the new company?

Thanks

What do you mean you changed LTD companies?

[TheBigD]

AFAIK, you'll still be effected by the two year rule regardless of whether you changed to a ltd, from brolly to ltd etc etc...

[Rookie]

Probably a good place to start looking:

http://www.hmrc.gov.uk/employers/ebi...-travel-06.htm

[Mart001]

i believe the two year rule is to the individual and not the company.

[NotAllThere]

It is the location of you, the worker.

As has been discussed time and time and time again.

Not the company you work through. Not the company you work for. Not the agency you work through. It's where you are working.

[blacjac]

Or in other words.....



no.

[LisaContractorUmbrella]

The 24 month rule applies to the location of your contract; you could actually end one contract and start another with a completely different company, agency etc but if your travelling time did not differ significantly and the span of the two contracts was 24 months + the rule would still apply.

[BolshieBastard]

Hi,

Quick question.

My next contract will take me over 2 years at my current site.

However, I changed LTD companies 6 months ago. In this instance, did the 2 year rule start over from when I started with the new company?

Thanks

Yes, claim travel expenses again for another 2 years.

You'll get alsorts of people saying 'no you cant do this' but HMRC have to investigate you first to find this situation.

I also know a number of accountants reckon they can successfully argue against HMRC's interpretation on the 2 year rule where you have set up a new company ergo you're a new employee \ resource working on a new contract.

Go right ahead is my thinking.

[Bob Jones]

The legislation is concerned with necessary attendance at workplaces and I can state categorically that it was not the intention of those who wrote the law for it to be circumvented simply by closing one company and opening another. The purpose of the legislation is to grant an allowance to those employees who, within their employment, move from site to site – certain caveats apply – one of which is that you a cannot have an allowance if you spend or are going to spend more than 24 months at a site – viz:
“A place is not regarded as a temporary workplace if the employee’s attendance is—
(a) in the course of a period of continuous work at that place—
(i) lasting more than 24 months, or ….”
Those who take the view that you can have another 24 months on the change of an employment are probably basing their view on the legal definition of a period of continuous work - viz
S339 (6) ITEPA 2003 “For the purposes of subsection (5), a period is a period of continuous work at a place if over the period the duties of the employment are performed to a significant extent at the place.”
Note – “…over the period the duties of the employment ….”. Does that mean that in the case of period of attendance where there are multiple employers each employment is looked at separately?
S336 ITEPA 2003 is the general expense rule and it states:
“..the employee is obliged to incur and pay it as holder of the employment…”.,
Note the legislation is in the singular but the Courts have decided that it is each and every holder not the particular individual so it could then be argued that “..the employment..” in S339(6) is all employments and that you do not look at each employment separately.
However, what you also have to bear in mind is this:
If a person is working on a project that is likely to last 5 years it will fail the 24 month rule from day one. If we follow the argument that you can change the company before the 24 months is up then the whole of the period will be at the one workplace and the claim will then fail by virtue of S339(5)(a)(ii) ITEPA 2003.
Bob.
www.internet-taxation.co.uk