24 month rule: why 'location'?

[JRCT]

I've read the sticky and a few other posts and I understand the principles of the rule and the reasons that it's there.

What I don't understand is why the 'location' considered is geographical and not client based.

If I, and another contractor work for Bank A for 22 months. We can each legitimately claim travel expenses.

Our contracts end and we both then get entirely independent contracts with new clients, for the next 12 months, nothing whatsoever to do with Bank A. Mine is 30 miles away in another town and his is 200 yards away from Bank A, in a financial district that has all of these banks in the same place (fairly common).

This means that I can continue to claim travel expenses as before, but he can't even though we've both done exactly the same thing and are in exactly the same situation.

I think I've understood this correctly, but I don't understand the point of it. What is it achieving?

[Ticktock]

What it is achieving is allowing employees a little bit of respite if their employer moves to a new location, so that they have time to consider whether they would like to move closer to the new location or else leave their job and find another closer to home.

It was never intended for contractors, but it's a loophole that most, myself included, take advantage of.

[northernladuk]

What it is achieving is allowing employees a little bit of respite if their employer moves to a new location, so that they have time to consider whether they would like to move closer to the new location or else leave their job and find another closer to home.

It was never intended for contractors, but it's a loophole that most, myself included, take advantage of.

Hit the nail on the head and I am sure I mention this every time we discuss this rule so I am surprised the OP hasn't seen it mentioned before.

[JRCT]

Hit the nail on the head and I am sure I mention this every time we discuss this rule so I am surprised the OP hasn't seen it mentioned before.

Sorry, I hadn't seen that mentioned before and I was conscious not to just ask a question without looking fr the answer myself. I know there's been a lot of discussion about this.

But then, if that is the case, why is the rule not just "You can claim expenses for 24 months, but then that's it. You either move to the new location or you don't. Either way, you can't claim any travel expenses after 24 months"?

I hope no-one at HMRC reads that, they might not have thought of it before.

[northernladuk]

Sorry, I hadn't seen that mentioned before and I was conscious not to just ask a question without looking fr the answer myself. I know there's been a lot of discussion about this.

But then, if that is the case, why is the rule not just "You can claim expenses for 24 months, but then that's it. You either move to the new location or you don't. Either way, you can't claim any travel expenses after 24 months"?

I hope no-one at HMRC reads that, they might not have thought of it before.

Erm, that is how it works isn't it? But if your job moves again the clock resets. You are thinking like a contractor which greys they whole thing as it wasn't designed for us. Not many permies will claim this and would be unlucky to do it more than once. They do not change locations anywhere near what we do and the rule wasn't designed to continue resetting.

[Maslins]

I've read the sticky and a few other posts and I understand the principles of the rule and the reasons that it's there.

What I don't understand is why the 'location' considered is geographical and not client based

I think it makes sense. If you expect to be working somewhere for (say) 6 months, it's unrealistic to expect you to move home just to be nearer the job, especially if you've got family, kids in local schools etc.

If on the other hand you expect to be somewhere (say) 3 years, and the travel costs are really high, it doesn't seem unreasonable to expect you to move closer to work.

To my mind the tax rules give leeway to those regularly working from different locations, but don't give leeway to those who have a long term long commute. Possibly they could argue it's fewer cars on the road/more space on crowded public transport.

If it was based on the client, you could commute to the same place for years on end, moving from one client to the one in the office next door every 18 months and always get relief. Nup, I think the current rules make more sense.

[Maslins]

But then, if that is the case, why is the rule not just "You can claim expenses for 24 months, but then that's it. You either move to the new location or you don't. Either way, you can't claim any travel expenses after 24 months"?

I accept that the expectation part of it is perhaps open to abuse...but again, if we gloss over that, the principle makes sense. If you get offered a 5 year contract starting now, and it's miles away, you should consider moving now, not waiting 23 months before making a move.

I can see arguments both ways, but I think current rules, whilst a little complex, make sense.

[kal]

I accept that the expectation part of it is perhaps open to abuse...but again, if we gloss over that, the principle makes sense. If you get offered a 5 year contract starting now, and it's miles away, you should consider moving now, not waiting 23 months before making a move.

I can see arguments both ways, but I think current rules, whilst a little complex, make sense.

If you were offered a 5 year contract then you can kiss goodbye to any travel expenses from day one... remember you have to stop claiming one you have a contract that takes you over the 24 months regardless...

[TheCyclingProgrammer]

If you were offered a 5 year contract then you can kiss goodbye to any travel expenses from day one... remember you have to stop claiming one you have a contract that takes you over the 24 months regardless...

Although only if you spend more than 2 days a week on-site on average, which is worth remembering if you mainly work from home.

[kal]

Although only if you spend more than 2 days a week on-site on average, which is worth remembering if you mainly work from home.

True.