Reply to: 24 Month Rule - what options?

[hugebrain]

For me they usually make the contracts around 364 days instead of for the full year. That way you at least get the full two years.

[moorfield]

Can you get away with buying and claiming an annual gold card just before you "know" you are going to be somewhere 2 yrs ?

How many people - I wonder - on here a blatantly ignoring this rule anyway ?

[ASB]

In the case of those of us with a Ltd company, then our company's office is our normal place of work.

That is often debated by HMRC in an investigation (not always successfully of course). In order for the home to be a normal place of work it is necessary to undertake substantive duties there. (Hector often likes to cloud the picture and claim substantive - substantial).

[Gonzo]

I will add also that if you are assigned to a project and you travel to that place of work each day for however long (3months for example), you can not claim subsistence and travel expenses, as it is deemed your normal place of work if you spend more than 40% there, even if you are within the 24month you still are travelling to a normal place of work.

Its different if you have a normal place of work then have to travel to another site or client, then you can claim.

If i am wrong someone please correct me

In the case of those of us with a Ltd company, then our company's office is our normal place of work. When we take a contract at a client, then the client site is a temporary place of work (unless we know we will be there for 24 months or more, obviously, the 40% rule aside).

[eddiegee]

Also 40% rule

I will add also that if you are assigned to a project and you travel to that place of work each day for however long (3months for example), you can not claim subsistence and travel expenses, as it is deemed your normal place of work if you spend more than 40% there, even if you are within the 24month you still are travelling to a normal place of work.

Its different if you have a normal place of work then have to travel to another site or client, then you can claim.

If i am wrong someone please correct me

[Cooperinliverp00l]

I'm in a 12 month contract and next april i'm expecting to sign another 12 month contract (if all goes well) i will still claim my expenses until the end of that with the opinion of although i'm going to hit 24 months i don't know if the contract will run for another 12 months i.e termination before 24 months or my LTD co pulling me out to go onto another project ?

Surely that is another view point

[TheFaQQer]

Thanks Gonzo, yes there's lots of variables as usual.

I thought it was as soon as it's over 24 months. Luckily I've never been burnt by it.

No, it's as soon as you know that it will be over 24 months - if you sign a 12 month, then a 3 month, then a 12 month, then you stop claiming the expenses as soon as you start the second 12 month contract.

I would argue that you only know that you will be there for over 24 months once you have a commitment in writing to be there for that time.

One question that arises is if you sign a 12, 3, 12 contract (as above), stop claiming expenses at month 15 (once you know it is going to be over 24 months) and the client terminates the contract before 24 months are up, can you claim the expenses?

[Chugnut]

Thanks Gonzo, yes there's lots of variables as usual.

I thought it was as soon as it's over 24 months. Luckily I've never been burnt by it.

[Gonzo]

Surely that would have only been the case if the last contract had exceeded the 24 months in total, and it won't have done.

We are in one of those areas where the helpful HMRC people don't give precise rules for us to apply, just guidance.

However, the part that is clear is "a workplace is not a temporary workplace if the employee can expect to work there in a continuous period of work lasting 24 months or more" (taken from HMRC website).

In the OP's case, when they signed the second contract then they expect the continuous period of work to last 24 months so should not be claiming for travel to site from then on.

Of course it is not quite that simple.

Cowboy Bob is right in that it is when you "know" that it will be 24 months that you can no longer claim and this may not be the same as signing the contract, although I think you could argue that you don't really "know" until the contract is signed.

Of course, it could also be argued that if you start on a project that is going to last 24 months or more then you cannot claim from day one, even if the contracts are divided into 3 month chunks, although unless you are the PM then I think it should be possible to argue that you did not expect to be involved for the entire duration.

[TheFaQQer]

It's as soon as you know (not when you sign) you'll go over 24 months that's true. But the OP knows the gig goes on until June 2008. If they knew that when they signed their first 12 months then they could not have claimed travel expenses, never mind their second.

No - the OP knows that the project will last for a long time, and says that there is a chance (s)he may still be there, but hasn't got an expectation of being there, so can still claim the expenses.

My current project will run for another four years - my contract ends end of November. So should I stop claiming travel because the project will last longer? Of course not, since I won't be here for that length of time.

[Chugnut]

It's as soon as you know (not when you sign) you'll go over 24 months that's true. But the OP knows the gig goes on until June 2008. If they knew that when they signed their first 12 months then they could not have claimed travel expenses, never mind their second.

True, it wasn't clear when the OP found out how long the project would last.

I just didn't think he would have known upfront that he would have been safely in contract for two and a half years, but I guess I assumed that since it's never been clear on any of the contracts I've taken in nine years of contracting!

[r0bly0ns]

All it means is that where you work is now classed as your 'permanant place of work' as far as HMRC are concerned so you can no longer claim expenses for working there without them becoming BIK.

It has no other consequences whatsoever.

In the case put by the OP, it was actually classed as a "permanent place of work" when the last 12 month contract was signed so travelling expenses should not have been claimed since then.

Hence me saying "now" and not "in 2008"

[Cowboy Bob]

Surely that would have only been the case if the last contract had exceeded the 24 months in total, and it won't have done.

It's as soon as you know (not when you sign) you'll go over 24 months that's true. But the OP knows the gig goes on until June 2008. If they knew that when they signed their first 12 months then they could not have claimed travel expenses, never mind their second.

[Chugnut]

In the case put by the OP, it was actually classed as a "permanent place of work" when the last 12 month contract was signed so travelling expenses should not have been claimed since then.

Surely that would have only been the case if the last contract had exceeded the 24 months in total, and it won't have done.

[FarmerPalmer]

In the case put by the OP, it was actually classed as a "permanent place of work" when the last 12 month contract was signed so travelling expenses should not have been claimed since then.

absolutely.