24 month confusion

[MrBen]

Can anyone please advise.

I have been a contractor with a Limited Company and outside of IR35 for just over 2 years. I have been working for an end client for about 2 years on various projects and considering accepting an extended engagement with the end client. I travel regularly to the end client office in Scotland for about 3-4 days per week. I also work at my home office for 1-2 days per week and occasionally travel to the end client office for a few days in the south east of England ever quarter.

My accountant and I seem to be confused regarding the 24 month rule.

I understand that I cannot personally claim any expenses from my company for travelling to the end client site after attending the end client site for more than 24 months. So for example, I would not be personally able to claim mileage to drive to Scotland.

However, all other travel expenses are paid for by my Limited Company on either a Company Credit Card or Company Debit Card and invoicing/receipting is in the name of the company. Any VAT is then claimed back if required in the quarterly return. For example, my Limited Company purchases rail tickets, accommodation, meals incurred whilst staying overnight etc. for the exclusive purposes of my travelling to and working at the end client site. All these expenses are not claimed back personally but are wholly paid for by the company. Can these still be claimed as a legitimate business expense and fall outside of the 24 month rule? Or can they still be claimed for travel to other end client locations where I work less than 40% of the time that are deemed not the primary end client location?

Can someone please shed some light….

[eek]

Can anyone please advise.

I have been a contractor with a Limited Company and outside of IR35 for just over 2 years. I have been working for an end client for about 2 years on various projects and considering accepting an extended engagement with the end client. I travel regularly to the end client office in Scotland for about 3-4 days per week. I also work at my home office for 1-2 days per week and occasionally travel to the end client office for a few days in the south east of England ever quarter.

My accountant and I seem to be confused regarding the 24 month rule.

I understand that I cannot personally claim any expenses from my company for travelling to the end client site after attending the end client site for more than 24 months. So for example, I would not be personally able to claim mileage to drive to Scotland.

However, all other travel expenses are paid for by my Limited Company on either a Company Credit Card or Company Debit Card and invoicing/receipting is in the name of the company. Any VAT is then claimed back if required in the quarterly return. For example, my Limited Company purchases rail tickets, accommodation, meals incurred whilst staying overnight etc. for the exclusive purposes of my travelling to and working at the end client site. All these expenses are not claimed back personally but are wholly paid for by the company. Can these still be claimed as a legitimate business expense and fall outside of the 24 month rule? Or can they still be claimed for travel to other end client locations where I work less than 40% of the time that are deemed not the primary end client location?

Can someone please shed some light….

None of those expenses are claimable. Larger consultancies are very careful not to keep the same people in remote locations beyond 2 years for that reason.

[Lance]

None of those expenses are claimable. Larger consultancies are very careful not to keep the same people in remote locations beyond 2 years for that reason.

yup.

To the OP -----
Paying out of your company doesn't change anything.
And could mean you'll have a bigger mess if you get caught.

And you're claiming VAT back on expenses. You're not flat rate??

You say that you and the accountant don't agree. What does the professional that you pay for expertise say?

[TheCyclingProgrammer]

Employee expenses (travel, subsistence, accomodation etc) are employee expenses regardless of whether they are paid by you and reimbursed or paid by the company. Same rules (and reporting requirements, generally) apply.

Therefore on the basis of what you've said you will no longer be able to claim travel costs to your client's office. However you will be able to claim the occasional travel costs to the end client as it is a different location and one you spend less than 40% of your time at.

[LondonManc]

All these expenses are not claimed back personally but are wholly paid for by the company.

So if you claim the expenses back from your limited, they are still wholly paid for by the company....


Once you know that you're going over 24 months (you could get an extension offer after 22 months), you've got to stop claiming. If it's no longer economically viable, you've got options, including:
- walking away
- asking for a rise to cover them
- asking someone else to pick up the tab for travel and accommodation expenses
- asking for a change in working practices to allow the 40% rule mentioned above to work in your favour

[northernladuk]

I'd be interested in the details of this 'various projects' situation. That and the fact they now want an extended engagement sounds about as part and parcel as it gets. If your paperwork isn't water tight you are in trouble. That said I think you are even if it is as working practices trump the contract.

[LondonManc]

I'd be interested in the details of this 'various projects' situation. That and the fact they now want an extended engagement sounds about as part and parcel as it gets. If your paperwork isn't water tight you are in trouble. That said I think you are even if it is as working practices trump the contract.

Well, quite. Being inside IR35 would save the debate but still leave the option of the client picking up the tab for expenses. It's certainly a conversation to have with the client - something along the lines of "my working practices have changed and it appears I will now be under IR35 as part of my new contract. As such, I can no longer claim expenses; would you be willing to cover all my travel and accommodation costs?"

[northernladuk]

Well, quite. Being inside IR35 would save the debate but still leave the option of the client picking up the tab for expenses. It's certainly a conversation to have with the client - something along the lines of "my working practices have changed and it appears I will now be under IR35 as part of my new contract. As such, I can no longer claim expenses; would you be willing to cover all my travel and accommodation costs?"

Well at least that would give his client a good laugh for the day.

[LondonManc]

Well at least that would give his client a good laugh for the day.

Well, they've changed the game so you've got to adapt.

[Jessica@WhiteFieldTax]

..snip..

I understand that I cannot personally claim any expenses from my company for travelling to the end client site after attending the end client site for more than 24 months. So for example, I would not be personally able to claim mileage to drive to Scotland.

Bear in mind that is based on contractual expectation, not actual attendance. Hypothetically your claim stops when the contracts take you over a 24 month expectation.