24 mth rule - same distance travelled

[Burnerg81]

Fair to say it's not claimable given what most people have said, but ultimately my accountant says it is...

Who's liable if I did claim but was audited? Me but possibility of getting it back from the accountancy firm? (Is that even likely or just a long painful court process).

To answer a previous question, yes, the job is still worthwhile. My day rate has gone up so even allowing for the extra travel costs I'm still making more and it's likely going to be a 3 yr programme, so likely extended.

[WTFH]

It's the same joinery via car until the last 20 mins at which point I'll go left rather than right... Not exactly significant to me...

You are being deliberately evasive when asked a straightforward question, so no, 100% no, not claimable.
And if you choose to, you are liable, not your accountant.
All they need to do is show that you were evasive to them, and it’s all your fault.

[MrButton]

So from that point on, it's 20 minutes to the left for one gig and 20 minutes to the right for the other gig? If so, then they are 40 minutes apart? That starts to be significant.

I’m no expert but....

Isn’t it all about ‘the journey’.

Not the distance apart.

Who's liable if I did claim but was audited?

You.

[NotAllThere]

If you follow your accountant's advice and he's wrong, you'll have to pay back taxes and interest, if investigated. Unless HMRC decide that you were deliberately misclaiming, you're unlikely to be charged penalties. Usually it's a simple - that expense is disallowed, please pay £x tax.

You have a two hour drive to the office. After 1:40, you go left instead of right. Assuming 30mph, that's 20 miles to the left of your previous location. That's like the distance between Oxford and Reading, or Neaden and Croydon. Completely different locations - ergo, not significantly the same journey.

It seems you view it as the same journey because it takes you the same amount of time and probably similar roads. To me it clearly isn't the same journey as the end locations are not even nearly the same.

[Hobosapien]

If you follow your accountant's advice and he's wrong, you'll have to pay back taxes and interest, if investigated. Unless HMRC decide that you were deliberately misclaiming, you're unlikely to be charged penalties. Usually it's a simple - that expense is disallowed, please pay £x tax.

This. As long as you are truthful with your accountant and follow their advice then that is what you are paying for (them understanding and following the rules and doing the work required to meet them in the form of filings) and while it will likely be uneconomical to pursue any legal claim against the accountant (i.e. suing them) if HMRC pull them up on their advice, you can at least try to offset any penalties by asking them to be covered at the accountant's expense.

When my accountant asks for certain information for routine filings throughout the year they sometimes include a note in the correspondence about them not being liable if I provide the details too late to meet the filing deadline (so if I meet their timescale and they file too late that's on them) or if I don't provide them with accurate information (they can only work with what I provide). I wouldn't want to rely on having to take legal action against my accountant though, but it's good to know that I can rely on them to know the rules and I just have to meet their requirements for them to fulfil them. Also helps with being Ltd as the limited liability means personally I am not at risk (i.e. prison) if I follow my accountant's advice, it's just financial risk if anything goes wrong.

Trust your accountant, they will have experience to know what HMRC expect, otherwise you may as well ignore the regular advice on here to ask your accountant.

[WordIsBond]

OP, if you don't want to be specific about locations on an open forum, you could at least tell us this:

1. If you drive directly from the old location to the new location, how far is it in miles? How long would it take? Your earlier comment gives the impression it is 40 minutes from one to the other. Is that accurate?

2. Is the nearest rail station to the new location also the nearest rail station to the old location?

And here's a few other questions.

A. If you lived next door to the old location, would you consider the new gig to be at a new location?

B. If you lived at the point where you either turn right or left, would you consider the new gig to be at a new location?

C. If you lived half an hour from the old location, and you had to travel past it and then 30-40 minutes on to get to the new location, would you consider the new location to be exactly that, a new location?

I suspect, if they are half an hour or more apart, that you would consider it a new location in either of those cases. In that case, the similarity in the journey for the first 1:40 is an 'accidental consequence' of where you live, rather than that the locations are a single location.

This example is, I believe, instructive: https://www.gov.uk/hmrc-internal-man...anual/eim32286. If you lived elsewhere (next to one of the locations, for instance), the nature and cost of the journey would be significantly different between the two locations. If you lived between them the cost might be similar but the journey would be completely different.

I don't have specifics, but if the two are more than half an hour apart I would assume they are different locations, and claim, especially on accountant's advice. If I were particularly risk averse I might also put the tax payable on that claim into an interest bearing account and not touch it.

There's one other factor nobody else picked up on. Do you already reasonably expect the new gig to exceed 24 months? You said 3 years. If you already have that expectation then you can't really claim anyway.

[Burnerg81]

Thanks everyone for your advice.

I'm not sure why someone thought I was being deliberately evasive, but either way, taking into account everyone's comments I'd deem my journey to be not significantly different from the current (soon to be old) one.

I'm pretty risk averse so case closed.

[mudskipper]

To answer a previous question, yes, the job is still worthwhile. My day rate has gone up so even allowing for the extra travel costs I'm still making more and it's likely going to be a 3 yr programme, so likely extended.

If your expectation is that you will be there for three years, then it will fall foul of the 24 month rule.

[Hobosapien]

If your expectation is that you will be there for three years, then it will fall foul of the 24 month rule.

Ignore your expectations as wishful thinking and only base the 24 month rule breach on agreed contract length*. If you stick to the paper trail evidence you avoid tripping yourself up by saying yes you expected to be there despite there being no guarantee until the client offers a contract to prove the intention.

* As such 3 month extensions have the benefit of not breaching the 24 month rule as early as 6 month or longer term extensions (insert no-tulip-sherlock emoticon here ), so the relatively shorter 'guaranteed' work has an advantage in the expenses that can be claimed.

[WordIsBond]

Ignore your expectations as wishful thinking and only base the 24 month rule breach on agreed contract length*. If you stick to the paper trail evidence you avoid tripping yourself up by saying yes you expected to be there despite there being no guarantee until the client offers a contract to prove the intention.

* As such 3 month extensions have the benefit of not breaching the 24 month rule as early as 6 month or longer term extensions (insert no-tulip-sherlock emoticon here ), so the relatively shorter 'guaranteed' work has an advantage in the expenses that can be claimed.

It depends on the paper trail, doesn't it? If there's a paper trail that it is already expected to be a three year project and that OP is likely to be part of it, and he ends up indeed being part of it for three years, contract length is unlikely to persuade HMRC. They'll say the contract length was a sham, that there was MOO for three years, and what actually happened bears that out.

There's usually a lot more paper trail than merely the signed contracts.

You are right that 3 months can be better than 6 months as 24 months in a gig approaches. One more way in which the stupid tax system runs counter to good business. Any normal business supplier would want to nail down longer contracts. The UK tax system penalises contractor businesses if they don't appear to sufficiently be in business for themselves, and penalises them if they do what any other businesses would do -- build lasting business relationships and long term contracts. Idiocy.