24 month rule resetting the clock

[Weller1]

I have been working for one client at one site for over 24 months under an umbrella company, i dont claim travel expenses now because of the 24 month rule.

I have been advised by my umbrella company that if i set up my own Ltd company this will reset the clock as i am deemed to have changed employment.

I find it difficult to agree with this statement as i thought umbrella or ltd it is the site where i have worked is the key here and not the employer.

Has anyone got views on this?

[cojak]

I have been working for one client at one site for over 24 months under an umbrella company, i dont claim travel expenses now because of the 24 month rule.

I have been advised by my umbrella company that if i set up my own Ltd company this will reset the clock as i am deemed to have changed employment.

I find it difficult to agree with this statement as i thought umbrella or ltd it is the site where i have worked is the key here and not the employer.

Has anyone got views on this?

Your Umbrella company is talking a load of old rubbish.

The 24 month rule has nothing to to with employment, it has EVERYTHING to do with location.

See here for details: http://forums.contractoruk.com/accou...ml#post1696559

[northernladuk]

Did you stop claiming as soon as you knew you were going to be there 24 month or at 24 months?

[onscreen]

Your Umbrella company is talking a load of old rubbish.

The 24 month rule has nothing to to with employment, it has EVERYTHING to do with location.

See here for details: http://forums.contractoruk.com/accou...ml#post1696559

Wow I had no idea it was based mainly on location and thought it was contact based, I've started a new contract but in the same city, so I assumed my 24 month rule reset, however this is not the case? I've been claiming mileage and substiance for way over 24 months now in the same city...

[northernladuk]

Wow I had no idea it was based mainly on location and thought it was contact based, I've started a new contract but in the same city, so I assumed my 24 month rule reset, however this is not the case? I've been claiming mileage and substiance for way over 24 months now in the same city...

If that is the case the best advice would be not to bend down for the soap....

[psychocandy]

Did you stop claiming as soon as you knew you were going to be there 24 month or at 24 months?

Bet I can guess which one LOL....

[supersteamer]

When do you Know?

What does "know" mean? - I can't see any concrete definition on the HMRC web site

Sequence of events

(a) Casual chat with client about renewing beyond 24 months
(b) Client says funding available
(c) Client says sorry, no funding available
(d) Client says actually, there is funding available - can you stay?
(e) Agent calls to say client want to renew pending some paperwork
(f) Agent calls to say problems with paperwork
(g) Agent says renewal may not happen now
(h) Agent says Great News! Renewal will happen!
(i) Nothing happens
(j) Some renewal paperwork appears riddled with errors and is sent back
(k) Corrected paperwork finally appears
(l) Paperwork signed and returned
(m) Paperwork countersigned and returned
(n) Start working on contract covered by renewal
(o) Working beyond 24 months

Now, given no MOO then the only time you really know for sure you'll be at a site beyond 24 months is (o) once you've actually been at a site beyond 24 months.
HMRC are not going to accept that argument :-)

So where in the above chain of events do I actually "know"? Given this took over two months to sort out then it's a fair chunk of cash in expenses between (a) and (m).

[northernladuk]

I think I would have stopped claiming at item d) and if I wasn't going to stay then I would claim it retrospectively. If I stayed then I wouldn't have been claiming since d) so everything is ok.

Only you know what a 'fair chunk of expenses' is but remember only 20% of that affects your pocket.

[Wanderer]

Now, given no MOO then the only time you really know for sure you'll be at a site beyond 24 months is (o) once you've actually been at a site beyond 24 months.
HMRC are not going to accept that argument :-)

So where in the above chain of events do I actually "know"?

S339(3) ITEPA 2003 states that you are caught by the 24 month rule at a time when it is reasonable to assume that you will be there for more than 24 months. HMRC's interpretation of the 24 month rule is along the same lines.

Who can tell you when it's reasonable to expect that you will be there for 24 months? Not us. Write a detailed explanation to your accountant, get a written reply and then abide by their guidance. If they say it's reasonable and you agree then claim it and you have the opinion of a professional to back you up. If they say don't claim then you shouldn't claim.

Alternatively, people can keep arguing the point until someone gives you the answer that you want.

[BolshieBastard]

Wow I had no idea it was based mainly on location and thought it was contact based, I've started a new contract but in the same city, so I assumed my 24 month rule reset, however this is not the case? I've been claiming mileage and substiance for way over 24 months now in the same city...

This is only a mild concern since it will only have a potential detrimental effect IF hmrc ever investigate you. If they dont, they'll be none the wiser.

To re set the 24 month clock, to all intents and purposes you need to spend some time in a different geographical location and not just a few miles away.

That said, just say 'No!' to brollies.