tax bill

[LisaContractorUmbrella]

Hi there,

I am a contractor working with the same company for last 1 and half year. One of my colleague told me that after two years with the same company we tend to increase our tax liability by 25%. Is this true? Does anyone have any idea about it?

He is probably talking about the 24 month rule which states that after 24 months on the same site, or as soon as you become aware that your contract will extend beyond 24 months, you can no longer claim travel and accomodation expenses. As expenses claimed via umbrella or Ltd company reduce your tax liability not be able to claim them would, in turn, increase your liability.

[bledubd]

best ask him what he means by tax liability seeing we pay so many ltd taxes. as said above you loose the travelling expense claim.

[Sausage Surprise]

Does he mean you can't claim your travel expenses?

[poppy01]

Hi there,

I am a contractor working with the same company for last 1 and half year. One of my colleague told me that after two years with the same company we tend to increase our tax liability by 25%. Is this true? Does anyone have any idea about it?

I guess he can only mean that after 2 years then he thinks you will be caught by IR35. Longevity of a contract alone is not an indicator of employment, the contract and working practises should also be taken into account, and if you have insurance I dont think you need to worry, It does affect what you can claim as expenses though.

[Jai D]

Hi there,

I am a contractor working with the same company for last 1 and half year. One of my colleague told me that after two years with the same company we tend to increase our tax liability by 25%. Is this true? Does anyone have any idea about it?