24 month confusion

[SueEllen]

What do you mean permies can no longer claim expenses? That doesn't make sense.

If you work for a consultancy and are put on a project elsewhere that lasts longer than 2 years you can't claim expenses.

[pr1]

What do you mean permies can no longer claim expenses? That doesn't make sense.

permies have the 2 year rule for temporary workplace too

[Lance]

What do you mean permies can no longer claim expenses? That doesn't make sense.

Oddly enough PC is right.
Temporary workplace definitions (2 years, 40%) are just as valid for permies.

[malvolio]

Oddly enough PC is right.
Temporary workplace definitions (2 years, 40%) are just as valid for permies.

Correct. Although I would put it as the rules were put in place for permies and we get caught by them...

[MrMarkyMark]

If you work for a consultancy and are put on a project elsewhere that lasts longer than 2 years you can't claim expenses.

Yep +1

[northernladuk]

But this is driven by a tax rule isn't it? The company can still reimburse them whatever they want. If a permie incured a 59 quid expense his employer can still give him his 59 quid back. Might cost the employer more cause he can't claim the tax but it's still a cost of doing business?
Same with training on new skills that are new skills so don't meet the HMRC criteria. The business can still pay for it whether they can claim tax or not?

[Lance]

But this is driven by a tax rule isn't it? The company can still reimburse them whatever they want. If a permie incured a 59 quid expense his employer can still give him his 59 quid back. Might cost the employer more cause he can't claim the tax but it's still a cost of doing business?
Same with training on new skills that are new skills so don't meet the HMRC criteria. The business can still pay for it whether they can claim tax or not?

well yes. But if they pay the employee more than they're entitled to they'll have to pay tax. IE. It will either be a straight PAYE 'bonus' or go on the P11d as a BIK.

[malvolio]

But this is driven by a tax rule isn't it? The company can still reimburse them whatever they want. If a permie incured a 59 quid expense his employer can still give him his 59 quid back. Might cost the employer more cause he can't claim the tax but it's still a cost of doing business?
Same with training on new skills that are new skills so don't meet the HMRC criteria. The business can still pay for it whether they can claim tax or not?

Not that simple. They can increase the permie's salary to cover their additional costs, with the same overheads as any other salary package. That's just another operating cost overhead and would obviously be subject to a proper cost/benefit analysis but there's not reason not to do it.

However they have multiple strings to the business and multiple roles within it. It is very easy for them to argue that, for example, training an employee in a given technology or a new skillset, is all part of their overall business and so is fully deductible. Hence all such costs are offset against CT. Since we have only two or three discrete skills as part of our business - and most have only one - we can't use that justification.

[Lance]

Not that simple. They can increase the permie's salary to cover their additional costs, with the same overheads as any other salary package. That's just another operating cost overhead and would obviously be subject to a proper cost/benefit analysis but there's not reason not to do it.

However they have multiple strings to the business and multiple roles within it. It is very easy for them to argue that, for example, training an employee in a given technology or a new skillset, is all part of their overall business and so is fully deductible. Hence all such costs are offset against CT. Since we have only two or three discrete skills as part of our business - and most have only one - we can't use that justification.

Outside of IR35, tax rules are the same for contractors as permies. You are a permanent employee of your own company.
As for training, it;s also the same, the company can pay for training and if for example it was an MBA then HMRC would come looking for BIK tax from the employee.

[MrMarkyMark]

But this is driven by a tax rule isn't it? The company can still reimburse them whatever they want. If a permie incured a 59 quid expense his employer can still give him his 59 quid back. Might cost the employer more cause he can't claim the tax but it's still a cost of doing business?
Same with training on new skills that are new skills so don't meet the HMRC criteria. The business can still pay for it whether they can claim tax or not?

They can, but it is one of the reasons that the consultancies will only have someone on site for 2 years, in most circumstances.
They usually shunt them around all over the place to keep that tax benefit.