IR35 confirmation / clarification

[LisaContractorUmbrella]

Thanks Lisa. As I understand it that I can work in Edinburgh, for example, for 12 months, take 6 months off (or work for a different client) and then work for another 12 months in Edinburgh and should be ok. The other threads posted by Clare may indicate this should be ok.

Unfortunately that's where things get a little bit complicated - the 24 month period is rolling and, in these circumstances, the 40% rule would be applied. This is from HMR&C and may make things a little clearer:

EIM32108 - Travel expenses: travel for necessary attendance: the 24 month rule: breaks in attendance: example
An employee is employed as a human resources consultant. She works full-time at a client's site for 17 months developing a new staff appraisal system and then deals with unexpected priority work elsewhere for 3 months. She then returns to the client's site for a further 6 months to co- ordinate the roll-out of the new system, as had been planned from the outset of the project. A deduction is due for the full cost of travel from her home to the client's site for the first 17 months but no deduction is due for travel costs for the further 6 months.

The client's site is capable of being a temporary workplace because her attendance is for a limited duration, see EIM32075. For the first 17 months the client's site is not prevented from being a temporary workplace by the further rule explained in EIM32080. Her attendance is in a period of continuous work (she works there for 40% or more of her working time) but it is not expected at the outset that the period will exceed 24 months. So for the first 17 months the client's site is a temporary workplace.

For the further 6 month period the expectation has changed. She now expects to spend 40% or more of her working time at the client's site for a period that exceeds 24 months (17 + 3 + 6 = 26). Therefore, for the further 6 months the client's site is treated as a permanent workplace.

[pmeswani]

Unfortunately that's where things get a little bit complicated - the 24 month period is rolling and, in these circumstances, the 40% rule would be applied. This is from HMR&C and may make things a little clearer:

EIM32108 - Travel expenses: travel for necessary attendance: the 24 month rule: breaks in attendance: example
An employee is employed as a human resources consultant. She works full-time at a client's site for 17 months developing a new staff appraisal system and then deals with unexpected priority work elsewhere for 3 months. She then returns to the client's site for a further 6 months to co- ordinate the roll-out of the new system, as had been planned from the outset of the project. A deduction is due for the full cost of travel from her home to the client's site for the first 17 months but no deduction is due for travel costs for the further 6 months.

The client's site is capable of being a temporary workplace because her attendance is for a limited duration, see EIM32075. For the first 17 months the client's site is not prevented from being a temporary workplace by the further rule explained in EIM32080. Her attendance is in a period of continuous work (she works there for 40% or more of her working time) but it is not expected at the outset that the period will exceed 24 months. So for the first 17 months the client's site is a temporary workplace.

For the further 6 month period the expectation has changed. She now expects to spend 40% or more of her working time at the client's site for a period that exceeds 24 months (17 + 3 + 6 = 26). Therefore, for the further 6 months the client's site is treated as a permanent workplace.

I know the 24 month rule applies to location, however the example you gave Lisa is for the same client. Would it make any difference if the client was different but in the same geographical location?

In my case (contrary to the examples I gave in my previous posts), I spent 3 months in Edinburgh, 9 months in Watford, 6 months in Brentford / Middlesex, and could end up with a 5 or 6 month contract in Edinburgh for a different client (in a different area). If I interpret the rules correctly, I should be ok. But the £1 million question is, would I be?

Sorry for being a bit thick.

[LisaContractorUmbrella]

I know the 24 month rule applies to location, however the example you gave Lisa is for the same client. Would it make any difference if the client was different but in the same geographical location?

In my case (contrary to the examples I gave in my previous posts), I spent 3 months in Edinburgh, 9 months in Watford, 6 months in Brentford / Middlesex, and could end up with a 5 or 6 month contract in Edinburgh for a different client (in a different area). If I interpret the rules correctly, I should be ok. But the £1 million question is, would I be?

Sorry for being a bit thick.

You're not being thick at all - 24 month rule is notoriously complicated. It wouldn't make any difference if you worked for a differen client but were in the same geographical location - if your daily journey did not significantly change the rule would still apply. With the example you have given you would be fine because your total time spent in Edinburgh would be about 9 months.

[pmeswani]

You're not being thick at all - 24 month rule is notoriously complicated. It wouldn't make any difference if you worked for a differen client but were in the same geographical location - if your daily journey did not significantly change the rule would still apply. With the example you have given you would be fine because your total time spent in Edinburgh would be about 9 months.

Thanks for this. If I am able to secure the contract, I will have to determine if the 2 clients are in the same geographical location. The timings would be different if I am going to stay in the exact same location, but not significantly (probably 10 to 15 minutes difference in terms of walking distance).

[LisaContractorUmbrella]

Thanks for this. If I am able to secure the contract, I will have to determine if the 2 clients are in the same geographical location. The timings would be different if I am going to stay in the exact same location, but not significantly (probably 10 to 15 minutes difference in terms of walking distance).

You don't need to worry at all Pmeswani - the 24 month rule won't apply to you at all as your total time spent on contract in Edinburgh will be, should you secure this new contract, 9 months; so unless you get an extension there isn't an issue for you

[northernladuk]

Sorry if this has now been answered as I didn't read the whole thread.

I made a compilation of all 2 year threads which got sticked and unstickied. Just a dump of all posts up to date. Maybe something in those will help?

2 year rule collated threads

[pmeswani]

Sorry if this has now been answered as I didn't read the whole thread.

I made a compilation of all 2 year threads which got sticked and unstickied. Just a dump of all posts up to date. Maybe something in those will help?

2 year rule collated threads

Thanks for this. I vaguely remember this thread. If I had seen it before I asked the question (and it's my fault for not searching for it properly), I would have refined my question accordingly. However, my head normally hurts when I read some of the threads as it tends to give confusing answers.