24 month rule affects hotel?

[MrBen]

Hello, I hope you can advise. I'm on a contract undertaking a massive global project and travel to the client site for 3 days/2 nights every week. The client site is about 280 miles away. I've now been travelling to the site more than 2 years and when realised I was going to be there for more than 2 years, my company stopped paying all my expenses (train, meals, mileage, car parking, hotel etc). I've read on some sites that it may be possible to claim just the overnight hotel costs as you need somewhere to sleep and it's not like I can just go home!

Can you please advise on whether just the 2 nights hotel costs can be claimed by the company? I can't seem to find a definitive answer on this. Thanks again for all advice. Much appreciated.

[cojak]

No, travel and accommodation cannot be claimed by the company once it is known that the contract will go over 24 months. HMRC expects you to relocate after 2 years, not continue staying away from home. So the company was quite correct to stop these expenses.

Read here for more details.

http://forums.contractoruk.com/accou...-nutshell.html

[WordIsBond]

If you could WFH or from a different client site every other week you'd be under the 40% barrier. Even if it is a client site on the Continent, that might end up saving you money.

Obviously that's not often practical.

[ChimpMaster]

If you could WFH or from a different client site every other week you'd be under the 40% barrier. Even if it is a client site on the Continent, that might end up saving you money.

Obviously that's not often practical.

Even though he's already been there 2 years, are you saying (for example) that he could now switch to 2 days client office / 3 days WFH and then restart claiming expenses?

[TheCyclingProgrammer]

Even though he's already been there 2 years, are you saying (for example) that he could now switch to 2 days client office / 3 days WFH and then restart claiming expenses?

Not immediately. You need to look back at the previous 24 months at any given point and see if you've been working there more than 40% of the time so it would be a while before you would drop below the 40% threshold (I can't be bothered to work out exactly when).

[ChimpMaster]

Not immediately. You need to look back at the previous 24 months at any given point and see if you've been working there more than 40% of the time so it would be a while before you would drop below the 40% threshold (I can't be bothered to work out exactly when).

If you've been on-site 60% of the time for 2 years then at a very basic calculation you would have to work on-site for only 20% of the time for the next 2 years to get down to 40%. So I guess after 4 years you could restart claiming expenses!

[WordIsBond]

Not immediately. You need to look back at the previous 24 months at any given point and see if you've been working there more than 40% of the time so it would be a while before you would drop below the 40% threshold (I can't be bothered to work out exactly when).

Right you are, that was careless of me. Yes, it's based on the average time for the entire term of the engagement. So if he's been at 60% for 2 years, it would take a long time to bring the average down to 40%.

Thanks, guys, for picking up on that and correcting my error.

[LondonManc]

Hang on, are the coverage of expenses explicitly in the contract? If so, that's different to a personal travel and accommodation expense.

[b r]

So the company was quite correct to stop these expenses.

This is incorrect if you are a PAYE employee as your post reads a bit strange - are you a contractor or PAYE employee?

As a contractor the company could pay these costs for you but you'd then be then creating BIK.

FWIW I reckon you'll find most contractors just claim the costs irrelevant - as if you were a PAYE employee your company would pickup the costs anyway.

[LondonManc]

This is incorrect if you are a PAYE employee as your post reads a bit strange - are you a contractor or PAYE employee?

As a contractor the company could pay these costs for you but you'd then be then creating BIK.

FWIW I reckon you'll find most contractors just claim the costs irrelevant - as if you were a PAYE employee your company would pickup the costs anyway.

What is annoying is the virtual restraint of trade that the 24-month rule brings in. If I've implemented a successful project at one client over the last 20 months, why can't I leverage that knowledge at a local rival of theirs without falling foul of the expenses rule? In effect, you're going from £80ish to £140ish for a £100-a-night hotel.