Reply to: 24 month rule again!

[Pondlife]

If your total engagement is less than 24 months then you can claim.

If your total engagement at a client site is over 24 months but you have spent less than 40% of your working time at the site on a rolling 24 month basis, you can claim. Once you go over the 40% level (or expect to) in a 24 month period then it's no longer a temp location.

That's how I understand it.

Just to add that it's based on time at location regardless of client.

[psychocandy]

If your total engagement is less than 24 months then you can claim.

If your total engagement at a client site is over 24 months but you have spent less than 40% of your working time at the site on a rolling 24 month basis, you can claim. Once you go over the 40% level (or expect to) in a 24 month period then it's no longer a temp location.

That's how I understand it.

Me too or so I thought but see Anders above - claims for 17 then can't claim for less 6 months. Still only 23 months...

Maybe its incorrect....

[Pondlife]

If your total engagement is less than 24 months then you can claim.

If your total engagement at a client site is over 24 months but you have spent less than 40% of your working time at the site on a rolling 24 month basis, you can claim. Once you go over the 40% level (or expect to) in a 24 month period then it's no longer a temp location.

That's how I understand it.

[psychocandy]

Example two: Anders works in human resources as a consultant and is taken on by a client who wants him to design new systems in a project which lasts 17 months. He is then needed urgently on a project in one of the client’s other offices, before returning to the previous client’s offices for 6 months in order to implement the new system, which was part of the initial contract. Because this additional period was planned from the outset, Anders initially had the expectation of working at the main client site for less than 24 months, so relief can be claimed for the first 17 month stint. He can also claim relief for the 3 months spent at the secondary site as this constitutes a separate site, however, he cannot claim for the final 6 month period as he now has the expectation of working at the same site for more than 40 per cent of his time in a 24 month period.

In this example, 17 months to start with then 3 months somewhere else, then 6 months back. Still less than 24 months total but he cant claim. In the 24 months before (counting back from the end of the 2nd six months) its been 21 months at main site, 3 months new place, But 21 months is way more than 40% of the 24 months BUT HES STILL BEEN THERE LESS THAN 24 MONTHS TOTAL. This is from Nixon Williams website.

Same with me, Site A 3 months, then Site B 8 months, then Site A 21 months. Using the above example above, I would be disallowed from claiming after 7 months of current gig. At that time (7 months into current gig), in the previous 24 months, I'd be 10 months site A, 8 months site B, 6 months unknown. So more than 40% of my time in the past 24 months at site A.

This would indeed be crap and I hope it doesnt work like this but, I still think there are inconsistencies here in how it all works. I agree with how malvolio says it works (or it should) but NW seem to be saying slightly differently here...

Any comments on this? Seems to imply that it doesnt have to be 24 months just 24 months from when you first started with a gap that doesnt count....

[Old Greg]

It is what it is OG.

And I'm not getting to get into the argument about "My contract is more IR35 friendly than yours because I'm more important and I'm a better contractor than you". Or wave my willy around (although it is a wanger)

IR35 isn't relevant to me anyway - just interested. As long as you've had your contract and working practices reviewed and "passed", then I'm sure you're fine, mate.

[psychocandy]

Of course you wouldn't

It is what it is OG.

And I'm not getting to get into the argument about "My contract is more IR35 friendly than yours because I'm more important and I'm a better contractor than you". Or wave my willy around (although it is a wanger)

[eek]

Interesting. Of course it also increases the incentive to "decide" you're out of IR35.

Yep. It's one of this occasions where you see HMRC reacting to a problem without looking at the consequences.

This decision fixed a problem for them (pressure to avoid cowboy companies from forcing their "umbrella" employees to become "limited company" employees.

This then made ir35 which was virtually worthless with the new dividend tax into something that has a value again

[Old Greg]

I wouldnt say Im borderline. Not as clear cut as others admitedly but still think Im in the clear.

I have IPSE coverage at the moment.

Of course you wouldn't

[psychocandy]

So from the perspective of someone like PC, borderline IR35 with BAU part-and-parcel work, the risk of being ruled inside IR35 is greater now? Does IR35 insurance cover the repayment of travel / subsistence expenses?

I wouldnt say Im borderline. Not as clear cut as others admitedly but still think Im in the clear.

I have IPSE coverage at the moment.

[Old Greg]

Yes and it would depend on the policy.

Interesting. Of course it also increases the incentive to "decide" you're out of IR35.

[eek]

So from the perspective of someone like PC, borderline IR35 with BAU part-and-parcel work, the risk of being ruled inside IR35 is greater now? Does IR35 insurance cover the repayment of travel / subsistence expenses?

Yes and it would depend on the policy.

[teapot418]

So from the perspective of someone like PC, borderline IR35 with BAU part-and-parcel work, the risk of being ruled inside IR35 is greater now? Does IR35 insurance cover the repayment of travel / subsistence expenses?

I believe the policies that cover tax liability do now also cover the tax liability on T&S expenses. (Remember, it's just the tax, not the whole expense)

[Old Greg]

You are utterly wrong there. Limited company Directors who are working inside IR35 can no longer claim for travel and subsistence.

See April 2016 | Changes to Travel and Subsistence Expenses

So from the perspective of someone like PC, borderline IR35 with BAU part-and-parcel work, the risk of being ruled inside IR35 is greater now? Does IR35 insurance cover the repayment of travel / subsistence expenses?

[teapot418]

No, if you're using a Ltd Co. Thank IPSE's lobbying efforts for that concession.

Brolly users have a whole other set of concerns around expenses of course, but those are unrelated to IR35 and their "employers" will have a handle on them.

A limited Co contractor working inside IR35 cannot claim T&S from April '16.

IPSE's advice confirms this.

https://www.ipse.co.uk/policy/travel...nce-tax-relief

IPSE made sure the voice of limited company contractors was heard, and Government listened. In their Autumn Statement, they announced changes to tax relief on travel and subsistence will not affect so-called ‘Personal Service Companies’, unless IR35 applies. This means freelance businesses will rightfully be able to claim the tax relief, subject to future possible changes to IR35.

[eek]

No, if you're using a Ltd Co. Thank IPSE's lobbying efforts for that concession.

Brolly users have a whole other set of concerns around expenses of course, but those are unrelated to IR35 and their "employers" will have a handle on them.

You are utterly wrong there. Limited company Directors who are working inside IR35 can no longer claim for travel and subsistence.

See April 2016 | Changes to Travel and Subsistence Expenses

As for the IPSE part, I think we will have to agree to disagree over who achieved what the final result was.