HMRC 24mth rule

[diesel]

I have been working for a client over 24mth now. I usually work for this client ~2 days per week, although was almost full time during the summer only.

I work when they need me (project demands) and sometimes a few hours from home.

This is my only client for past year, previously i had a 2 active clients in different locations.

I am rather confused by the HMRC 24mth rule, so welcome any views if people think i could be hit by the 24mth rule.

[malvolio]

1. Try a search. I posted a llink to a clear explanation of this a while back.

2. Alternatively go visit my Blog and look for the Article on 24 months (hint: it's easy to find).

3. If you're not on site more than roughly 40% of the time, it probably doesn't matter anyway. See the above for the explanation as to why

HTH

[Nixon Williams]

Tax relief is available for travelling & accommodation expenses in certain circumstances, it is worth noting that the legislation is designed to allow travel and subsistence to an employee who moves from site to site within their employment.

Relief is available for travel between home and a temporary workplace. You cannot claim for ordinary commuting.

A temporary workplace is where you go to perform a task of limited duration or for a temporary purpose.

Whether you can treat their workplace as temporary depends upon how long you are based at one particular site or expect to spend at one site, the amount of time spent at a workplace is also considered.

In most cases a temporary workplace will be one that you do not NOR expect to be at the site for more than 24 months.

Example
If you sign a twelve month contract (at a new location), then you will be able to claim for most of the travel/accommodation costs involved.

If, at the end of this contract you extend it for a further twelve months, at this stage you expect to be at the site for a total of at least 24 months and so any claims for travel/accommodation would cease at the date you sign the contract.

If you extended for just 11 months, you could continue to claim, because at this stage you do not expect to be at the site for 24 months.

There are some special circumstances that may affect any claims, please contact our office (01253 362000) if you require further details:
If you are only based at one site whilst working through your company and then you close the company.
If you work at more than one site on the same contract
If you generally work at various sites within a defined location (eg City of London)

I hope this helps.

Alan

[diesel]

Thanks for your replies. (just to clarify i have my own Ltd co setup at present).

malvolio - I have seen your blog notes on this and at least its less confusing than the HMRC rules and examples. I agree there seems to be confusion between an employee place of work and a contractor/freelancer place of work.

I guess as I have been working at this client office for over 24mths even though on border of the 40% criteria, i would not be eligible to claim expenses...

I do not travel from site to site as at present i only have 1 client. I either work at there office or from home. As my contracts are outside IR 35 and i am not managed by client, and work when it suits me and when it suits project schedule, does this mean i can still argue that client office is a temporary place of work?

I would be interested in how others have got "round" this rule in terms of presenting a successful argument to HMRC.


Edit - been reading some past posts and i am not sure is the 40% refer to the time spent at client / total hours worked in the 2 years? or is 40% of total time available (i.e 2 days out 5?)

As i only work for 1 client at present, rest of week i am at home looking around for work.
thanks

[malvolio]

The 24 months is a rolling window; that's what catches people out. "Starting now, what has been your attendance over the previous 24 months?" is the exam question. I think you may be safe, TBH, on the numbers you've quoted: they are guidelines rather than rules and you could probably argue your case if challenged. However IANAL. much less a tax man!

[PAH]

I would be interested in how others have got "round" this rule in terms of presenting a successful argument to HMRC.

Fact is you can claim whatever expense you like for as long as you like. It only becomes an issue if HMRC do an investigation into your expenses.

I've only had one investigation into mine in over 12 years and it passed because I don't take the piss, but I do claim for as much as I can.

I do wonder what the penalty would be if I'd claimed too much or for something I shouldn't have. Repayment with a bit of a fine, or possible prison sentence?