IT Contractor help

[tractor]

...

So you need to stop claiming now, because you know that the place of work is no longer temporary.

As cojak says - the first umbrella is right, the second is lying. The only thing you can do from here is to leave and find another contract in a different location, or stay in the same location and not claim the expenses.

Changing client, umbrella, your name, anything other than the location in which you work will not enable you to claim travel and subsistence expenses any more without incurring a BIK.

Exactly why I asked the question. OP still hasn't said at what point they knew it was going to exceed 24 months.

e.g. if you take a 36 month contract, you know from day 1 that it will and therefore cannot claim expenses. If you sign a 6 month extension at 23 months, you know then that it will be over 24 months and at that point, the same is true.

[JRCT]

Is it reasonable to expect that the work will continue? If so (and in this case I think there is no doubt that it will), then you should stop claiming. Just thinking "this could run for years" wouldn't be a reasonable expectation, though.

If you stop claiming and then they give you notice, you can start claiming again, but you can't back-date the claims unfortunately.

So if the work is expected to last more than 24 months, you can't claim regardless of the how long you personally expect to continue doing the work at that location?

So this guy couldn't claim anything...

"I've got a 3 year project I want you to work on"
"I'm DEFINITELY emigrating to Australia in 12 months"
"Ok. I'll give you a 12 month contract and I'll find someone else to continue the work when you're gone"
"Ok. I'll work for you for 12 months"

[TheFaQQer]

So if the work is expected to last more than 24 months, you can't claim regardless of the how long you personally expect to continue doing the work at that location?

So this guy couldn't claim anything...

"I've got a 3 year project I want you to work on"
"I'm DEFINITELY emigrating to Australia in 12 months"
"Ok. I'll give you a 12 month contract and I'll find someone else to continue the work when you're gone"
"Ok. I'll work for you for 12 months"

He would claim because he has the reasonable expectation that his work location is temporary - 12 months.

[JRCT]

He would claim because he has the reasonable expectation that his work location is temporary - 12 months.

So, applying that same logic. If the OP changes her contract end to 30th June, and sticks to it - ie. leaves before the 24 months is up, then she can still claim too?

I'm not being argumentative, by the way, HMRC guidelines are as clear as mud on what 'expectation' means. But, I don't see the difference.

[JRCT]

Just found 'another' explanation on this link
Contractor doctor: can you clarify the 24 month expense rules?

According to David Colom, of the London-based contractor affairs specialist firm DJ Colom & Co.....

Imagine a case, one that is very common, in which a contractor is engaged for a 6-month period four times. That contractor can deduct expenses for the first, second, and third six-month period. But when it comes time to sign up for the fourth one, the contractor should reduce the period to 5 months and 3 weeks. The contractor can then truly say that the 24-month rule does not apply, nor did the contractor have any knowledge that it would last to 24 months--because it doesn't. ''Take a week off at the end of the contract,'' Colom says, ''and deduct your travel expenses.

Obviously if the client wants a fifth contract, you're out of luck.





I deduce from that, and particularly when reading the full article, that expectation = contract. Nothing more.

[LisaContractorUmbrella]

So, applying that same logic. If the OP changes her contract end to 30th June, and sticks to it - ie. leaves before the 24 months is up, then she can still claim too?

I'm not being argumentative, by the way, HMRC guidelines are as clear as mud on what 'expectation' means. But, I don't see the difference.

If an extension was offered which took the OP beyond 24 months and another was then subsequently offered which took the contract to 23 months and 29 days HMRC would probably question it as the intention was for the OP to avoid the implications of the legislation

[DannyF1966]

I deduce from that, and particularly when reading the full article, that expectation = contract. Nothing more.

This makes sense to me, plus I see plenty of other posts on here in other threads that say "do what you're contracted to do, no more, no less, and don't expect anything from the client other than what's in the contract". So why should "I'm contracted for x months but expecting it to be extended several times so therefore I can't claim expenses" come in?

In other words, if the contract says x months, expect to be looking for another contract in x months time, even if the project could run on for far longer.

[tractor]

...

Just found 'another' explanation on this link
Contractor doctor: can you clarify the 24 month expense rules?

According to David Colom, of the London-based contractor affairs specialist firm DJ Colom & Co.....

Imagine a case, one that is very common, in which a contractor is engaged for a 6-month period four times. That contractor can deduct expenses for the first, second, and third six-month period. But when it comes time to sign up for the fourth one, the contractor should reduce the period to 5 months and 3 weeks. The contractor can then truly say that the 24-month rule does not apply, nor did the contractor have any knowledge that it would last to 24 months--because it doesn't. ''Take a week off at the end of the contract,'' Colom says, ''and deduct your travel expenses.

Obviously if the client wants a fifth contract, you're out of luck.





I deduce from that, and particularly when reading the full article, that expectation = contract. Nothing more.

Agreed.

But take reality a step further, a 36 month contract that is canned after 23 months. Can you put in a travel claim for those 23 months? Good luck with that! That the reality is different from the intention is irrelevant. It is the intention that is important and if that is supported by a contract, that is what counts.

[JRCT]

If an extension was offered which took the OP beyond 24 months and another was then subsequently offered which took the contract to 23 months and 29 days HMRC would probably question it as the intention was for the OP to avoid the implications of the legislation

I disagree. I think the OP's intention would be to play within the rules. The 24 month rule. It's no different to any other limit.

You pay yourself a salary right up to your tax free limit an no more. You don't pay a salary of only £5k just to be safe.

You claim exactly 10,000 miles at 45p, not 9,500 just to be on the safe side.

And so on.

Agreed.

But take reality a step further, a 36 month contract that is canned after 23 months. Can you put in a travel claim for those 23 months? Good luck with that! That the reality is different from the intention is irrelevant. It is the intention that is important and if that is supported by a contract, that is what counts.

I agree with you on that, and I understand why you can't claim in those circumstances.

[Batcher]

If an extension was offered which took the OP beyond 24 months and another was then subsequently offered which took the contract to 23 months and 29 days HMRC would probably question it as the intention was for the OP to avoid the implications of the legislation

Sorry, a bit OT from the OP but to clear it up:

I can see your point about changing the dates but if someone gets 4 x 6 month contracts then surely that would be exactly 24 months and therefore not subject to the 24 month rule?