Closing old company / starting a new one

[oliverson]

What Lance says but it's not really a big place for the purposes of the rule. It's hotly debated and one of the grey areas on here but many journeys are not significantly different in time and cost. We get people that argue the tube fare is 6 quid more or overall distance is 10 miles more. Try arguing with someone that lives in Manchester and works in Birmingham that that is significant.

So, if I were to move to Spain and fly back to London for all my gigs, I wouldn't be a UK tax resident so therefore the ruling wouldn't apply anyway. Rather a drastic approach to avoid it mind.

[northernladuk]

I used to think I'd be OK with the 2 year rule on current gig but now I'm not sure. I work three days a week from home, two days a week client site. The ruling says 40% or more so I'm right on the waterline. Would it be enough to say I work 7 hours on client site and 8 at home to push it over the edge? Plus, I'm sure this has been asked before but London is a big place. Is it really the same location if I'm in the City for one gig and Canary Wharf for another? I'd be renting the same accommodation either way so I'm guessing it will be. Whatever the answers I don't think it's going to impact me because I'm probably quitting contracting before the 2 year rule on current gig (maybe sooner if the Autumn budget reveals more clangers for contracting).

What Lance says but it's not really a big place for the purposes of the rule. It's hotly debated and one of the grey areas on here but many journeys are not significantly different in time and cost. We get people that argue the tube fare is 6 quid more or overall distance is 10 miles more. Try arguing with someone that lives in Manchester and works in Birmingham that that is significant.

[oliverson]

3@home & 2@site is exactly 40%.
What about when you aren't available (holidays etc.) that should seal the 40% for you.

Interesting. i'd not thought of it like that (term of 'placement' at temporary site), I was thinking, albeit incorrectly, on a weekly basis. I've also spent 7 months of this gig working 6/7 day weeks, with only ever 2 days at client site.

[Lance]

I used to think I'd be OK with the 2 year rule on current gig but now I'm not sure. I work three days a week from home, two days a week client site. The ruling says 40% or more so I'm right on the waterline. Would it be enough to say I work 7 hours on client site and 8 at home to push it over the edge? Plus, I'm sure this has been asked before but London is a big place. Is it really the same location if I'm in the City for one gig and Canary Wharf for another? I'd be renting the same accommodation either way so I'm guessing it will be. Whatever the answers I don't think it's going to impact me because I'm probably quitting contracting before the 2 year rule on current gig (maybe sooner if the Autumn budget reveals more clangers for contracting).

3@home & 2@site is exactly 40%.
What about when you aren't available (holidays etc.) that should seal the 40% for you.

[oliverson]

Sadly this is all too common. It's a very complicated rule what with all the grey areas but the basics are pretty clear. It's all about location. If there is no significant change to the journey then the clock carries on ticking. This is explicitly covered here

https://www.gov.uk/hmrc-internal-man...anual/eim32080



People often forget if they leave a perm role in say Leeds and take up a contract in Leeds they are already caught.... as it goes on location. So starting a new company up won't work.

I used to think I'd be OK with the 2 year rule on current gig but now I'm not sure. I work three days a week from home, two days a week client site. The ruling says 40% or more so I'm right on the waterline. Would it be enough to say I work 7 hours on client site and 8 at home to push it over the edge? Plus, I'm sure this has been asked before but London is a big place. Is it really the same location if I'm in the City for one gig and Canary Wharf for another? I'd be renting the same accommodation either way so I'm guessing it will be. Whatever the answers I don't think it's going to impact me because I'm probably quitting contracting before the 2 year rule on current gig (maybe sooner if the Autumn budget reveals more clangers for contracting).

[northernladyuk]

But he mysteriously got investigated a month later?

How much kick back do you get for reporting tax evaders nowadays?

Not me. I was seriously tempted once (same client as it happens) to dob in a contractor colleague who undercut me at renewal while she was using some film investment off-shore loan scam, but I couldn't bring myself to do it. I expect karma has caught up by now.

[northernladuk]

I had a contractor colleague a few years ago who had been claiming substantial travel expenses to the same site for four years. When I asked why / how, he replied, 'Because I want to and I probably won't get caught.'

But he mysteriously got investigated a month later?

How much kick back do you get for reporting tax evaders nowadays?

[northernladyuk]

This came up on conversation a couple of weeks ago at work with a new contractor [we were discussing the 24 month rule]. As a perm he'd apparently previously hired contractors that ended up staying in excess of 3/4 years. He was basically querying the validity of the 24 month rule. When I asked him how the contractors had got around the rule, he texted one of them there and then, who [in short] came bk & advised that he just created a new ltd co. and had the new contract put in new co name, & carried on claiming mileage etc.
Sounded like BS to me but given the initial post, then maybe that's what some ppl think they can do [& get away with it]?

I had a contractor colleague a few years ago who had been claiming substantial travel expenses to the same site for four years. When I asked why / how, he replied, 'Because I want to and I probably won't get caught.'

[SueEllen]

The nature and scope of consultation / services that I will be offering is about to widen significantly beyond the scope of those offered by the original company that I set up.
Assuming that the contract gets renewed I will remain with my current client, but will also be working with clients from a completely different industry sector, with completely different consultation/service provision requirements.
All of which would be easier to deliver under the banner of a new company.

I'm not in the business of shady practices or rule-bending. Just wanted to make that clear. 🙂

Good to hear!

[northernladuk]

A contractor I know did none of this. He just moved to a new contract/company in the same location, and thinks that keeps him compliant with the 24 month rule.

I tried explaining to him that it doesn't work like that. "My accountant says it does" says he. Nothing I could do could convince him otherwise, even sending him the examples from the HMRC website.

Exactly the same except the one I knew also used it to get the money out of the company in the most efficient way as well. His directors page on the company check sites looked more like a Gantt chart than a business history.