Does a gap of 3 months between contracts reset the 24 month rule?

[Moptop]

Just wondered if anyone had been in a situation similar to this:

I worked for a client at their offices for 12 months, and was not renewed.
3 months later, they re-engaged me, this time for 10 months. If I were to be renewed again (for, say, 6 months), would that mean my place of work was no longer 'temporary' (as I'd have worked there for more than 24 months)? Or is the clock reset by the 3 month gap?

[TheBigYinJames]

Or is the clock reset by the 3 month gap?

I think I rememebr seeing that it had to be at least a year, but I'm sure it'll be on the IR site somewhere.

[gingerjedi]

The 24 month rule comes into place as soon as you know you will be there for more than 24 months, 3 months isn’t enough of a gap (not sure but its at least a year) so 12+3+10 = 25 months so you should have stopped claiming travel expenses when you took the 10 month contract.

[NotAllThere]

Ability to claim is dependent on the percentage of time spent at the client site. So the 10 month might not take you into the "not claimable" sphere.

[RichardCranium]

A colleague spend 20 months working at ClientCo and finished the project he was working on.

He took 6 weeks off on holiday.

He had that contract terminated (because the work was complete).

He returned a couple of weeks ago to work on a new project, for a different programme, in a different office but on the same site. He'll be working on that one for another year or so. A new contract, not a renewal.

I reckon he ought to be able to claim it is a different gig and have the 24 month clock reset.

What does the panel think?

[thunderlizard]

No, the same site counts as the same site regardless of whether it's different contracts, clients or offices. The logic behind the tax rule is that travel to a regular place of work is personally taxable - it's nothing to do with who your customer is.

E.g. if my business is to shine shoes on Piccadilly Circus, and I do it for more than 2 years, my travel to Piccadilly Circus is taxable. The fact that I never shine the shoes of the same person twice is irrelevant.

[RichardCranium]

No, the same site counts as the same site regardless of whether it's different contracts, clients or offices.

Harrumph.

Bum.

23 month 3 week contracts it is for me, then!

[Gonzo]

Just wondered if anyone had been in a situation similar to this:

I worked for a client at their offices for 12 months, and was not renewed.
3 months later, they re-engaged me, this time for 10 months. If I were to be renewed again (for, say, 6 months), would that mean my place of work was no longer 'temporary' (as I'd have worked there for more than 24 months)? Or is the clock reset by the 3 month gap?

Did you have another client during the three months?

I was advised that a gap of at least three months travelling to a seperate workplace would be OK, but just having an extended holiday and then returning to the same temporary workplace would not be sufficient.



BUT the HMRC rules are not explicit. There are guidelines but no absolute boundaries and so they will always be a matter of interpretation. The HMRC may disagree with your interpretation in the event of an investigation.

[Integrity]

You might want to also check if the general area is what counts, and not a particular client site. So if you live in Bristol and do 23 months in Central London for Client A, then 12 months in Central London for Client B, that Central London generally stops being a temporary location at the start of the 2nd contract.

[Gonzo]

A colleague spend 20 months working at ClientCo and finished the project he was working on.

He took 6 weeks off on holiday.

He had that contract terminated (because the work was complete).

He returned a couple of weeks ago to work on a new project, for a different programme, in a different office but on the same site. He'll be working on that one for another year or so. A new contract, not a renewal.

I reckon he ought to be able to claim it is a different gig and have the 24 month clock reset.

What does the panel think?

I think that HMRC will scream BIK and demand the tax on them.