Extension taking me over 2years

[Bod]

A slightly different scenario....

I'm in a similar situation, but there are a few differences....

Been with client 21 months (currently on 3rd extension, which is due to end at 23 months), original contract states base location as central London - but I'm there only once or twice a month, the other days are spent at many client sites all over the UK

At 15 months, the client changed the contract so that base location is Peterborough - again I only go there once or twice a month

At 19 months, the client changes the contract so that base location is now my home address (Lancashire) - I'm now at home every day except for 4 journeys to London per month.

Client now wants me to extend for 6 months and I'm happy to do so... have I completely avoided the 24 month rule due to the base location changes? Did my 24-month clock reset when my base location became by home address?

The role has been identical throughout and apart from the recent "home working" I've been travelling to many different sites throughout.

Finally, I was under the impression that once you were aware that you were going beyond 24 months, that your previous expenses had to be repaid? Is it just that you have to stop claiming from 24 months onwards?

Cheers guys for your undoubtedly sage advice - and apologies for what must seem like amateurish questions from an old hand who should know better.

[Wanderer]

Client now wants me to extend for 6 months and I'm happy to do so... have I completely avoided the 24 month rule due to the base location changes? Did my 24-month clock reset when my base location became by home address?

The rule comes into play if you spend more than 40% of the working time or 24 months in one location, see EIM32080. It sounds like your base has always been your home address and all the travelling to various sites is ALL claimable.

Finally, I was under the impression that once you were aware that you were going beyond 24 months, that your previous expenses had to be repaid? Is it just that you have to stop claiming from 24 months onwards?

It's the latter. When you know that you will be based in one location for more than 24 months you have to stop claiming from then onwards. You don't have to repay anything you have already claimed in good faith when you presumed that you wouldn't do 24 months / 40% of your time on the same site. See EIM32106.

[northernladuk]

The rule comes into play if you spend more than 40% of the working time or 24 months in one location, see EIM32080. It sounds like your base has always been your home address and all the travelling to various sites is ALL claimable.

This is an interesting one. His contract has claimed different locations. As I read it...

0-15 Central London
15-19 Peterborough
19-23 Lancashire

All considerable changes in location so would this would have reset the clock on paper.

Does the fact he works from home not count towards the 40% off contracted site or does it mean 40% on any site regardless of which one?

I assume if he gets investigated the reality of main location will be a lot different to what is on paper so the contracted location would be ignored and the clock would start (and the 40%) from the time he started being based from home which appears to be all the time.

It does sound like he has based from home but if the travelling is as extensive as he says I guess to sleep soundly at night he would have to prove more than 40% away from home? Is that what you are saying Wanderer?

[Lumiere]

What if you were commuting, lets say, from Bristol to York for 15 months and then moved to London. Would extending the contract by 10 more months fall under this rule ?

[TykeMerc]

What if you were commuting, lets say, from Bristol to York for 15 months and then moved to London. Would extending the contract by 10 more months fall under this rule ?

As I understand it even though the trip is substantially different, it's the location you're travelling to not from that's important as it's travel to a temporary place of work.
So unfortunately if you agreed a 10 month (longer than 8.999 months in fact) extension you would know you're over 24 months so you couldn't expense that 10 months as you would know you're going to be there over 2 years.

As to Bod's situation I agree since you've not had a single or even a substantially similar temporary place of work and attended numerous sites across the period it would be easy to defend your right to expense indefinitely while the role is effectively mobile.

[Wanderer]

All considerable changes in location so would this would have reset the clock on paper.

Agreed. With every change the 24 month clock starts ticking again. Indeed, it the client has changed the location several times over 2 years then one could reasonably argue that you couldn't imagine that you would EVER settle into one location with the client so you keep claiming (in good faith) until you know otherwise.

It does sound like he has based from home but if the travelling is as extensive as he says I guess to sleep soundly at night he would have to prove more than 40% away from home? Is that what you are saying Wanderer?

Sort of. My understanding is that you are caught by the 24 month rule and cannot claim travelling to any given location if:

1. You work (or reasonably expect to work) in that location for more than 24 months AND
2. you work (or reasonably expect to work) more than 40% of your time at that location.

Home working counts towards option 2, so if you spend >60% of your time working at home then all travel to a location must be allowable as you spend < 40% at that location.

What if you were commuting, lets say, from Bristol to York for 15 months and then moved to London. Would extending the contract by 10 more months fall under this rule ?

Changing location to London resets the timer under option 1 above. If you go back to working in York then you need to consider the 40% rule under option 2.

As to Bod's situation I agree since you've not had a single or even a substantially similar temporary place of work and attended numerous sites across the period it would be easy to defend your right to expense indefinitely while the role is effectively mobile.

Agreed.


It's all a bit confusing though. It's worth having a read of the links to HMRC which give the definite answers..

[Lumiere]

Changing location to London resets the timer under option 1 above. If you go back to working in York then you need to consider the 40% rule under option 2.

London is where I live in the example (I continue to work in York).

Commute Bristol (home) ->York (clientco) for 15 months, then
Commute London (home) ->York (clientco) for 10 months

[TykeMerc]

London is where I live in the example (I continue to work in York).

Commute Bristol (home) ->York (clientco) for 15 months, then
Commute London (home) ->York (clientco) for 10 months

Unfortunately as I said earlier in your case you're stuffed when it comes to claiming expenses on that extension as the critical thing is the work location and not the home one. You can only claim expenses to a temporary place of work and at 24 months (or reasonable expectation that you will pass 24 months, a contract extension would be reasonable expectation) it stops being temporary.

[Wanderer]

London is where I live in the example (I continue to work in York).

Commute Bristol (home) ->York (clientco) for 15 months, then
Commute London (home) ->York (clientco) for 10 months

Sorry, I misunderstood.

As TykeMerc says it doesn't make a difference if your journey to the workplace changes, it's the location of the workplace that must change to reset the 24 month timer.

[Pogle]

Just an update - contract extended till just before my 2 years, so will renegotiate if they wish to extend further.