24 month rule - This is different!

[sociopath]

http://www.contractorcalculator.co.u...onth_rule.aspx

Any thoughts on this article?

[SueEllen]

http://www.contractorcalculator.co.u...onth_rule.aspx

Any thoughts on this article?

It's out of date.

[psychocandy]

It's out of date.

Couple of years old admitedly. Interesting vuewpoint on when it resets though.

[psychocandy]

Right heres the bottom line for me:-

3 months A
8 months B
12 months A

At this point, its been 24 months since the start of location A, and, at this point, its more than 40% of the time at location A, so you have to stop claiming (according to my accountant anyway).

Basically means that even 1 day at location A initially would preclude claiming for the full 24 months. There does seem to be an argument that a longer time at location B means a reset from the previous shorter time at location A.

Depends on risk. After all, the HMRC examples show a long time at location A, then short break. This appears to exist, for the permie world, to stop employer adding a short break to reset the clock completely. I'd argue this is different though.

Choice for me is to repay the last 5 months expenses and not claim for the next 6 (if Im still here). Looking at around £2K in extra CT/Dividend tax.

Or continue to claim working on the basis that, in your opinion, the rules mean that the clock has been reset. Accountant, suspected, are advising the first option but, of course, they have to be straight down the middle (and its not their £2K!).

Of course, if HMRC disagree theres a chance they'll force payment in any case. Not a problem I'm no worse of - just depends if interest/fines would then be payable.

[mudskipper]

3+8+12=23

[pr1]

Right heres the bottom line for me:-

3 months A
8 months B
12 months A

At this point, its been 24 months since the start of location A, and, at this point, its more than 40% of the time at location A, so you have to stop claiming (according to my accountant anyway).

Basically means that even 1 day at location A initially would preclude claiming for the full 24 months. There does seem to be an argument that a longer time at location B means a reset from the previous shorter time at location A.

Depends on risk. After all, the HMRC examples show a long time at location A, then short break. This appears to exist, for the permie world, to stop employer adding a short break to reset the clock completely. I'd argue this is different though.

Choice for me is to repay the last 5 months expenses and not claim for the next 6 (if Im still here). Looking at around £2K in extra CT/Dividend tax.

Or continue to claim working on the basis that, in your opinion, the rules mean that the clock has been reset. Accountant, suspected, are advising the first option but, of course, they have to be straight down the middle (and its not their £2K!).

Of course, if HMRC disagree theres a chance they'll force payment in any case. Not a problem I'm no worse of - just depends if interest/fines would then be payable.

Personally I'd say the rules are sufficiently vague that I'd reset the clock and go up to 24months at A in stint 2 (but would be prepared to pay up if proven otherwise). I don't think they could put a penalty on it as it is quite subjective so it's only interest (which is very low) that you'd end up losing out on, and that's IF it gets picked up - others' views may vary!

[dx4100]

3 months A - client 1
8 months B - client 1
12 months A - client 1

So you are saying the above is not allowed but....

3 months A - client 1
8 months B - client 2
12 months A - client 3

This would be allowed ? because you never go over 24 month in one stay....

[psychocandy]

3 months A - client 1
8 months B - client 1
12 months A - client 1

So you are saying the above is not allowed but....

3 months A - client 1
8 months B - client 2
12 months A - client 3

This would be allowed ? because you never go over 24 month in one stay....

No. Nothing to do with the client. In my case, all clients are different.

I'm saying according to some, the 8 months means the initial 3 is reset and not counted. Others would say, after 12 months at A 2nd time around you've got to stop because of the previous 3 months at A.

[dx4100]

No. Nothing to do with the client. In my case, all clients are different.

I'm saying according to some, the 8 months means the initial 3 is reset and not counted. Others would say, after 12 months at A 2nd time around you've got to stop because of the previous 3 months at A.

Quote from the HMRC

For the 24-month rule to apply, both legs of the test must be met; for a
workplace to be deemed permanent, the employee must have spent or be likely
to spend more than 40% of their working time at a workplace and they must
attend it or be likely to attend it over a period lasting more than 24 months.

So you can carry on claiming... You haven't had a 24 month stint at location A yet...

EDIT: Yet the Nixon Williams website says its a rolling window.... So who knows...

http://www.nixonwilliams.com/24-month-rule-for-expenses

[dx4100]

Ok... I use NW as my accountants so I will just have to use the rolling windows approach. Not going against my accountants advice.

I would choose option A and just stop claiming...