Two year travel rule

[chrisl]

Sorry if this has been asked before but...

If i work a contract for one year, then go on holiday for the second year, and then come back to the same client in the third year, will i be able to claim travelling expenses for the whole 2 year period of working for this client or only for the first contract.

I would have been working for the client for only 2 years but with a year break in the middle making the total period 3 years i am unsure how i stand.

[ratewhore]

Yes you can.

[TykeMerc]

My understanding (and I'm quite prepared to be corrected) is that the 2 year rule in effect defines if the workplace is temporary or permanent in travel terms.

The moment that you expect to work in approximately the same geographical place for a contiguous period of 2 years or more then it's not a temporary workplace but your normal location.

2 years in 3 isn't contiguous (or nearly so) so it shouldn't be any kind of an issue.

[Hex]

You would be OK for the 2 year rule, but you then have to examine the 40% rule.

This is explained to a degree here: www.contractoruk.com/guides/24_month_rule.html

[Hex]

But having read your original post again, I reckon you're fine. It's only after you've been there for another year that you need to worry about the 40% rule.

[TykeMerc]

As an addendum to my post the 2 year rule applies even if you've had multiple contracts at multiple clients, but they're at geographically similar locations.

e.g. You sign a new 3 month contract at client D and the last 21 months you were at clients A, B and C all within a few miles of D. HMRC's position is that your normal place of work is that geographical location as soon as you know you will exceed 24 months and not your home base.

Your original question posed the question with a 1 year break, my understanding is if you've had any kind of substantial break from 1 location it resets the clock to zero.

[chrisl]

Very useful, thanks alot.

[chrisl]

One last question guys.

If i worked for company A for two years say for example 6 April 2006 - 5 April 2008 and claimed travel expenses.
Then worked for company B somewhere else for 4 or 5 months, then came back to the original company A, i take it the 2 years will start again and this will not be classed as the same contract as before.

[BA to the Stars]

Also be aware, it is not the client location but the location where you are working e.g. you could work for several clients all within a few miles or so of each other in say the city of London so if you worked for client A for 18 months then client B in the same city, then the 2 year rule would kick in as soon as you became aware that you would be in the city for more than 2 years.

Conversely, you could work for the same client but at different locations e.g. BigBank PLC where you may have a contract for 18 months in London, then you are offered a 12 month contract with them in Bristol. In that case you are different locations (differing considerably geographically) and you are safe from the 2 year rule (unless you remained / were aware that you would remain at the current location for over 2 years).

[ratewhore]

One last question guys.

If i worked for company A for two years say for example 6 April 2006 - 5 April 2008 and claimed travel expenses.
Then worked for company B somewhere else for 4 or 5 months, then came back to the original company A, i take it the 2 years will start again and this will not be classed as the same contract as before.

Jesus, Hex has provided a link that explains all this!!