Expenses

[SlickFrog]

Alright guys,
I understand that after 2 years of working on the same (and first) assignment, you cannot claim expenses anymore, is this true and if so what do you think the best alternative is to max my income? I have my Ltd company at the moment but there is not much confidence with IR35 compliancy so I need an alternative now?

Would appreciate your help, cheers

SlickFrog

[r0bly0ns]

The 2 year rule only applies if you spend more than a certain amount of your work time at that location (50% I think).

Once you know that the post will last longer than 2 years then it is deemed your permanent place of work and nothing more.
As far as I know this has no implication on the IR35 status of the contract.

[TheFaQQer]

Either bump up your rate accordingly, or leave and find another contract.

[Bluebird]

Alright guys,
I understand that after 2 years of working on the same (and first) assignment, you cannot claim expenses anymore, is this true and if so what do you think the best alternative is to max my income? I have my Ltd company at the moment but there is not much confidence with IR35 compliancy so I need an alternative now?

Would appreciate your help, cheers

SlickFrog

1. It's at the point that you know you will be on-site for longer than 24 months that you can no longer claim expenses NOT when 24 months have expired [although they may be one and the same], so if you've been on site for 18 months, and they offer you a 12 month extension which you accept, it's then that you can't claim expenses anymore. However, if you are not on site permanently there is a pro-rata rule, and if you are only on site 40% of the time, then you can claim expenses indefinately.

2. If you are INSIDE Ir35, then I guess that you are paying full whack PAYE [or should be], to max your income as suggested before you need a new contract at a new client which is IR35 friendly - you could then take home 75-80% of the amount you invoice...

[XLMonkey]

The rules are explained in some detail here

http://www.hmrc.gov.uk/manuals/senew/SE32075.htm
and here
http://www.hmrc.gov.uk/manuals/senew/SE32080.htm

a rare case of HMRC giving clear guidance.

[eddiegee]

get setup under an umbrella. sjd, Danbro, and many others etc can help you with this, or carry on with your LTD but move to another assignment quickly to aviod IR35.

Although its unlikely, the last thing you need is HMRC to investigate! .

[The Rig]

surely,if you were a bit naughty,join a new umbrella company after 24 mths.

i know a chap who did this because of this exact reason,been on site 3 yrs,his umbrella are a bit slow (were).

[LisaContractorUmbrella]

surely,if you were a bit naughty,join a new umbrella company after 24 mths.

i know a chap who did this because of this exact reason,been on site 3 yrs,his umbrella are a bit slow (were).

Unfortunately moving to another umbrella company won't help. The 24 month rule applies to your place of work and not your employer's location.

[TheFaQQer]

surely,if you were a bit naughty,join a new umbrella company after 24 mths.

i know a chap who did this because of this exact reason,been on site 3 yrs,his umbrella are a bit slow (were).

If he's still claiming expenses, then he's stuffed if there's an investigation.

It has nothing to do with your employer, or even the end client - it's all to do with the LOCATION that you are working. Changing your umbrella is not going to enable you to claim expenses if you are in the same location for more than two years.

[The Rig]

i know location is the key, but so is the 2 year deal,his contract had a new date on it/reference number etc so when he went to new umbrella it was a different number to the old one, so in affect,it was a new contract in the eyes of the tax man.this was pure luck,he tried it and thats what happened.so he says anyway

he was with prosperity 4 before LOL