(Another) two year rule post

[JRCT]

My agency had contacted the umbrella organisation and had it extended to December 15, then shortly afterwards they would have asked them to change this to August 2015.

So in terms of audit trail, I guess there is something there somewhere.

This is the first time I've contracted (less than £15 an hour) which is why I used an umbrella company, but this is enough to make me never want to do it again in honesty. As it stands, I'm going to lose around an additional £200 a month in tax which I can't afford.

Looks like it's time to find a new job then!

Thanks to everyone for your help.

What if you take your extension through a different umbrella that will allow this?

[Markerton]

What if you take your extension through a different umbrella that will allow this?

It's my understanding that changing companies won't benefit, as it's entirely based on location.

[JRCT]

It's my understanding that changing companies won't benefit, as it's entirely based on location.

It is based on location, but you're contracted to that location for less than 24 months, it's just that your umbrella is, wrongly, playing safe on your behalf.

If you were a Ltd, you would just change the contract dates, as you have and carry on claiming. The only blocker here is your umbrella.

Obviously, if you extend again and exceed the 24 months, then you have to stop claiming, no matter what.

[Markerton]

It is based on location, but you're contracted to that location for less than 24 months, it's just that your umbrella is, wrongly, playing safe on your behalf.

If you were a Ltd, you would just change the contract dates, as you have and carry on claiming. The only blocker here is your umbrella.

Obviously, if you extend again and exceed the 24 months, then you have to stop claiming, no matter what.

Ah, I understand where you're coming from now.

Well I don't want to be here past January in honesty and I'd prefer the safety and stability of a permanent job.

On that ground, setting up a Ltd or changing umbrella probably isn't worth the effort.

I'll see how I feel post Christmas.


But again, thanks to everyone for your help.

[Contreras]

Ah, I understand where you're coming from now.

I'm not sure that you do. It wasn't being suggested to set up a Ltd.

With a new umbrella - one that knew nothing of the original contract date - it's being suggested that you could claim expenses without being accused of "playing the system".

However you might then (or might already, with the existing umbrella) fall foul of the single-location-per-employment gotcha, meaning the expenses become taxable once you leave. Sorry to be the bearer of bad news if that proves to (already) be the case.

[LisaContractorUmbrella]

I'm not sure that you do. It wasn't being suggested to set up a Ltd.

With a new umbrella - one that knew nothing of the original contract date - it's being suggested that you could claim expenses without being accused of "playing the system".

However you might then (or might already, with the existing umbrella) fall foul of the single-location-per-employment gotcha, meaning the expenses become taxable once you leave. Sorry to be the bearer of bad news if that proves to (already) be the case.

You are right Contreras - moving umbrella would make no difference to the OP's situation as his location won't have changed and, if he's thinking of going back to permieland then he wouldn't be able to claim expenses through the new umbrella anyway as his intention would only be to have the one assignment as their employee

[Contreras]

moving umbrella would make no difference to the OP's situation as his location won't have changed

Yes it would... You already said that revising the end date to be within 24m is legit. So if the OP moved to your company then you would allow it, and the OP could continue to claim up until end of the new contract?

Another workaround, if you believe the umbrella policy is wrong, is to reclaim the tax via personal self-assessment or P87.

But the problem is this (whether or not the umbrella is changed):

and, if he's thinking of going back to permieland then he wouldn't be able to claim expenses through the new umbrella anyway as his intention would only be to have the one assignment as their employee

... which effectively only kicks in at the end of contract, once the intentions are clear, I think. So the OP has time to prepare.

[scope]

I phoned them this morning to remove the lock on my expenses and they stated that "because the original end date was past the two year mark, they're unable to remove the lock even though it's now before then." I asked why, and they stated it's because HMRC would see this as "playing the system," and they "wouldn't be happy doing that."

Simples, resign from that umbrella company and take a new contract (up to 1 day before 2 years) with another umbrella - they will have no knowledge of the first (revoked) contract. Talk with your feet, dont pay an umbrella company that plays silly.

[LisaContractorUmbrella]

Yes it would... You already said that revising the end date to be within 24m is legit. So if the OP moved to your company then you would allow it, and the OP could continue to claim up until end of the new contract?

Oh sorry see what you mean - yes he could

Another workaround, if you believe the umbrella policy is wrong, is to reclaim the tax via personal self-assessment or P87.

But the problem is this (whether or not the umbrella is changed):
... which effectively only kicks in at the end of contract, once the intentions are clear, I think. So the OP has time to prepare.

Travel and subsistence are only allowable if the OP will have more than one assignment whilst in the employment of the umbrella company; if he is already looking for a perm job to move to once the assignment's finished then his intention is not to have more than one assignment and therefore the T&S would be disallowed.

[TheFaQQer]

Simples, resign from that umbrella company and take a new contract (up to 1 day before 2 years) with another umbrella - they will have no knowledge of the first (revoked) contract. Talk with your feet, dont pay an umbrella company that plays silly.

I don't think it's playing silly - they know that the contract is going to put the OP there for more than two years, so they are right to disallow any expenses. The OP knows the same.

Is there an expectation that the work will continue for more than two years? Yes. So the expenses shouldn't be allowed.