Another 2-Year-Rule Question !

[Cannon Fodder]

I have been contracted to a client in the Northwest for the past 18 months. As I live in East Anglia, the commuting costs are claimed as expenses. I use an umbrella company - and prefer to keep it that way for simplicity, tbh.

Now, approaching the point where a renewal of contract would hit knowledge of a 2-year period, I need to find a legitimate way to claim expenses - if there is one.

In discussing renewal with the client's agency, they suggested it might be possible to draw up a fresh contract with the client location in the Southwest (its a large corporate organisation, and my Manager *is* based in the Southwest), which sounds fine when you say it quick enough.

However, as the petrol and accommodation receipts would still have Northwest postcodes on them - because the work location would not be changed, just the paperwork location - does this have any validity?

It does not smell right to me. The agency can promise all they like - as she did, her hubbie apparently already does the same! - but HMRC would come in my direction for back-tax, not theirs...

Opinions, please. Any better solutions?

[NotAllThere]

As you would be lying about the journeys you're making, the proposed solution would be criminal fraud.

You may now start blackmailing your agent, which should offset the loss of tax-deduction on travel and subsistence.

[malvolio]

It won't work. It's the journey that counts, not the client. I would also be very suspicious of an agency trying to push you into evading taxes...

The best solution is to negotiate a rate rise to cover off some or all of the additional costs. You can still claim the expenses, it''s just they are now taxable as a BIK. So if you could add 40% of what you currently claim in expenses to your weekly rate, you'd break even. And some of that could come from the agency margin - they covered their costs along time ago - which might be a nice compensation for their attempt to get you to break the law...

[MyUserName]

In this situation imagine you worked for HMRC and you saw someone doing this. Would you think that it was a logical and fair business expense or would you think someone was using a fake address to pull the wool over your eyes?

Once you decided someone was trying to pull the wool over your eyes would you forget about it or would you go after them like a pitbull to make sure people know what happens to people who try to evade tax?

Seriously, this is no different to entering any other address you do not work at and claiming expenses for going there.

[Cannon Fodder]

Thanks for the answers, guys. You confirmed my suspicions.

It is possible renewal will not be offered for budgetry reasons - and to be honest I would not mind a break from the driving...

So, what would be the minimum amount of time to reset the 2-year clock, should renewal not go ahead?

If they sort their budget out, in say 3 months, there could be an opportunity to re-approach...

[LisaContractorUmbrella]

I am shocked that your agency would even make this suggestion - you are being actively encouraged to defraud HMR&C - at the very least it's totally irresponsible. I am afraid that there are no 'ways round' anything in these circumstance; your only real options are to find another assignment closer to home or negotiate the rate to cover additional costs

[northernladuk]

Thanks for the answers, guys. You confirmed my suspicions.

It is possible renewal will not be offered for budgetry reasons - and to be honest I would not mind a break from the driving...

So, what would be the minimum amount of time to reset the 2-year clock, should renewal not go ahead?

If they sort their budget out, in say 3 months, there could be an opportunity to re-approach...

It is 40% of time in that geographical location over a rolling 2 year period so 3 months is no way near enough, I don't believe 6 months will really cut it either but you would have to do the sums.

[SueEllen]

So, what would be the minimum amount of time to reset the 2-year clock, should renewal not go ahead?

If they sort their budget out, in say 3 months, there could be an opportunity to re-approach...

Get a decent contract in between for about a year.

[cojak]

<slowly bangs head against wall...>

[Wanderer]

Opinions, please. Any better solutions?

I suggest you go for one of those off shore, employee benefit trust schemes, preferably one that is "fully HMRC approved" and with a headquarters in Lagos.

You may even be able to do a little bit of side line business facilitating multi-million pound transfers through your bank account to help our Nigerian friends with their money problems that they always seem to be having.

Also, get some practice at picking up soap off the shower floor by bending your knees.