Expenses

[NotAllThere]

so in effect,it was a new contract in the eyes of the tax man.

No. If you work through UmbrellaCo1 in the City for 23 months, and then get a contract for 6 months with a new client in the City and work through UmbrellaCo2, your home to office expenses, if paid, are a BIK, and are taxable.

If UmbrellaCo2 are unaware that you're already two years into working in the City, they may well allow the expenses in their calculation of your pay. But the IR won't, and if you get investigated you run the risk of being done for tax evasion.

NotAllThere.

[TheFaQQer]

so in affect,it was a new contract in the eyes of the tax man

So he's already had an investigation and got through it? I'll bet he hasn't!

The key is being in the same location for more than two years - this is not "having the same contract", "working for the same client", "working for the same umbrella", "having a new reference number".

It has been held before that working in The City for more than two years for any number of clients constitutes a permanent place of work, and so no travel expenses were allowed.

Consider:
Contract1 - working through Umbrella1, for Client1 at 1 The High Street, My Town for 18 months

Contract2 - working through Umbrella2, for Client2 at 2 The High Street, My Town on a 9 month contract.

As soon as he starts the second contract, he knows that he will be in the same location for more than two years, therefore cannot claim expenses without constituting tax evasion.

If your friend has done this, and gets caught, then he will be paying up a large chunk of cash, with repayments, penalties and interest.

[welshman213]

Quick question gents, as this was not really answered in the post that I started.
As I have to rent somewhere away from home, wil this alo stop at the or the knowing of the 2 year mark, even though I have moved locations, (well 2 miles away)

Cheers

John

[FiveTimes]

Having read the above is it possible to form a new Ltd company and accept the contract that would have take you over the 2 year period ?
So the new company wouldn't have had any dealings with the client?

I doubt it, but thought I would put it out there for others to shoot down

[Bluebird]

Quick question gents, as this was not really answered in the post that I started.
As I have to rent somewhere away from home, wil this alo stop at the or the knowing of the 2 year mark, even though I have moved locations, (well 2 miles away)

Cheers

John

Yes,
It's all about being at a "temporary" workplace - once your workplace is no longer regarded as tempory - you can't claim travel or subsistance...

[Bluebird]

Having read the above is it possible to form a new Ltd company and accept the contract that would have take you over the 2 year period ?
So the new company wouldn't have had any dealings with the client?

I doubt it, but thought I would put it out there for others to shoot down

No.

It's not about the company - it's about you and where you work.

If you worked direct for a client and they changed hands, that doesn't reset the 24 month clock either.