Clarification on "2 year rule"

[Bob Jones]

Whether or not travel is allowable is not dependent upon IR35 - it is dependent upon the attendance at the workplace.
"I was told to make my invoices reflect the project and if one is then given a completely new contract with different teams, line managers, different project, and the invoices reflected this, this too would constitute a new start date for the 2 year rule...even if it were the same building."
This above is incorrect advice. The test is the answer to the question - at the end of this contract, or my invlovement in it will I be retained, or is it likely or reasonable to assume that I will be retained by my employer and moved to another location?
If you operate through your own company and fail IR35 your company is your employer so there is continuity of employment but there still has to be the change/potential change of workplace. If you work through a brolly then the brolly needs to have the overarching element built into the contract but again there has to the change/potential change of workplace. A new contract of whatever nature without a change of location does not restart the 24 month travel expense clock.
Probably not you wanted to hear but...
Regards
Bob

[simes]

re

Ok, many thanks Bob.

Always good to be clarified...!

Cheers.

[ntahall]

Further to my earlier posts I have written an article concerning the 24 month rule and, where appropriate, the further effect of the 40% "rule" (- which isn't actually a rule - it is a rule of thumb which everyone seems to be happy with ..) ...
The article is at http://www.contractoruk.com/news/004120.html or accessible from the home page ..

Thanks for this.

To clarify, if you get a 24 month contract at a new location, you can claim.

If you get a 1-year contract in year 1, are then away for year 2 and then get another 1-year contract in year 3 on the same site as the first, you can't claim the second contract on that site (year 3). This because on the first day of that 2nd contract you'll have spent 50% of the time at that place of work over that last 24 months.

Is this correct?

Thanks
Nick

[MPwannadecentincome]

This was discussed before (can't be bothered to search) and you were right with your first conclusion - if the clients are more or less in the same geographical area then you can't claim. So you can't claim for 2 workplaces in the city if it takes you over the 24 month rule.

http://www.hmrc.gov.uk/manuals/eimanual/EIM32080.htm

"This rule is modified where the employee works at a succession of workplaces but the change of workplace has no substantial effect on the employee's journey to work. All such workplaces are treated as the same workplace for the purpose of the legislation, see EIM32280 and example EIM32089. "

And this explains it better: http://www.hmrc.gov.uk/manuals/eimanual/EIM32089.htm

hmmm so if I have a contract in Paris for 18 months then a contract in Zurich for another 6 months and I commute from the same airport in London on a weekly basis, if I then take a contract in Frankfurt and fly from heathrow is my journey to heathrow now not expensed?

[NotAllThere]

hmmm so if I have a contract in Paris for 18 months then a contract in Zurich for another 6 months and I commute from the same airport in London on a weekly basis, if I then take a contract in Frankfurt and fly from heathrow is my journey to heathrow now not expensed?

Zürich, Frankfurt and Paris are not in substantially the same geographical area, so the whole journey is a valid expense.

If you live in London and drive to contract in Leeds for 2 years, then drive to a contract in Birmingham, you still get the mileage from London to the M6 junction. Don't give hector ideas!

[mattd]

I think from reading the thread that I already know the answer to this but, I'll ask anyway.

I live in Northeast of England and up until October last year I was working in the Northwest and had been for 18 months. In November I started a contract near London. The previous client have now asked me to go back, I will have been away for 6 months. If I take the previous 24 months I will have been working there for 75% of that, so I guess I am caught by the 2 year rule? Is that right?

[northernladuk]

I think from reading the thread that I already know the answer to this but, I'll ask anyway.

I live in Northeast of England and up until October last year I was working in the Northwest and had been for 18 months. In November I started a contract near London. The previous client have now asked me to go back, I will have been away for 6 months. If I take the previous 24 months I will have been working there for 75% of that, so I guess I am caught by the 2 year rule? Is that right?

Yup. That looks more like you have worked AWAY from your NORMAL place of work for 6 months so your stuffed. Always remember why the rule is there. It is a period of time that HMRC deem it long enough for you to work without reasonable considering relocation. To do 18 months in north, 6 months south and then back to north makes it look like that area is your normal place of work and would expect you to make the effort to relocate to that area and stop claiming expenses.

[mattd]

That seems pretty unfair as I had no idea I was going to be coming back. So why would I relocate to the northwest while working near London?

[northernladuk]

That seems pretty unfair as I had no idea I was going to be coming back. So why would I relocate to the northwest while working near London?

Inversely why relocate to London when it appears you were effectively based in the Northwest. Life isn't fair I am afraid.

[simes]

With trepidation;

I completed a contract in Dec 09 based in one building of a company.
Later, I was interviewed for an entirely different contract, with different managers/clients and in a different building - but the same town and same company. I started late Jan 10.

Is that a restart?