Reply to: 2 Year Rule ?

[Bertie]

Arguably correct.



It's a total farce. Like many of the absurd tax rules it's easy to be caught out while trying hard to comply and easy to fiddle if you try to.

Yep it is a farce. Why the hell did they come up with 40% ???

Less than half your time spent at a location ???

[TykeMerc]

No, that's wrong. It's a rolling 24 month period. So, from the day that you "clock up" >40% of the time in that location you cannot claim. It's an ar5e of a rule, but that's how it works.

Arguably correct.

Changed clients that are a distance apart or a seperate client in between and the waters get thoroughly muddied.

It's a total farce. Like many of the absurd tax rules it's easy to be caught out while trying hard to comply and easy to fiddle if you try to.

[Fred Bloggs]

15 months is way more than enough in my opinion. I'd treat a month as enough.

No, that's wrong. It's a rolling 24 month period. So, from the day that you "clock up" >40% of the time in that location you cannot claim. It's an ar5e of a rule, but that's how it works.

[TykeMerc]

How long should a break be? I've just started back in Bristol after a 15 month break, is that long enough to reset the clock?

BTW I didn't claim for the last year the first time round as I was there for 3 years so effectively I haven’t claimed travel to Bristol for 27 months, would this make a difference?

15 months is way more than enough in my opinion. I'd treat a month as enough.

[Bertie]

Is new location not Manchester per se but say Stockport or something similar ? Sometimes referred to as the bigger city but really a seperate identity ( Sheffield / Rotheram etc) .

Yeah, new contract would be city centre Manchester rather than previous contract in Cheshire.

Good point....

[Bertie]

I am sure that the 24 month rule was not aimed at people like you.The chance of looking for a contract all over the UK maybe europe as well and ending up in Manchester again is like winning 5 numbers on the lottery twice
in a row.
I guess in normal times you could say no to the 2nd Manchester contract but
we are not in normal times

Exactly

Mind you, as much as I do like Manchester,I would prefer to win the lottery

[rpgpgmr1]

You need to read the 24 month rule in conjunction more than 40 % of time at same location ( everyone forgets that bit ) . The claiming mileage is - as has been pointed out - for the employee of the ltd company , not the company itself. If your geographical area is still Manchester you may find yourself falling foul of the 24 mth / 40 % rule. However , 15 miles away from previous site might be enough .
I use London as a base line , so multiple contracts in City , even different clients , are still in the City and same location.
However 15 miles away might still be London but West London ( Ealing ) as opposed to East London ( Docklands) .
Is new location not Manchester per se but say Stockport or something similar ? Sometimes referred to as the bigger city but really a seperate identity ( Sheffield / Rotheram etc) .

[Brussels Slumdog]

Unlucky jobfinder

I live in Norfolk and have recently finished a two year contract in Manchester.

Have spent a few weeks at home 'resting' and it now looks like my next contract will also be in Manchester (different client).

Will the two year rule still apply (normal place of work / can't claim travel expenses thru my company) even though this will be a different client/contract ?

Any thoughts / advice appreciated

I am sure that the 24 month rule was not aimed at people like you.The chance of looking for a contract all over the UK maybe europe as well and ending up in Manchester again is like winning 5 numbers on the lottery twice
in a row.
I guess in normal times you could say no to the 2nd Manchester contract but
we are not in normal times

[BolshieBastard]

Oh ffs. Just close your ltd co and start a new one. Then claim again.

No doubt people will say you cant do this but if you have a savvie accountant, they'll argue with hMRC that you can. Oh, and that's IF HMRC actually get around to investigating you.

I've done it 3 times so far and never a word out of HMRC.

[ASB]

HMRC being deliberately vague again hoping people will be cautious and not claim, they have a bit of a track record for this.

I did stumble across something on AccountingWeb once, so a search on there might prove fruitful.

Me, I always claimed despite going over 2 years. HMIT didn't bat an eyelid in a full investigation (but might now).

[gingerjedi]

I presume the idea is that if you are working in one place continuously for more than two years then you are really expected to either relocate to that place or accept the costs for yourself because it is entirely your choice not to move there.

Which kind of makes sense.

If that is the idea then I would have thought that a gap of 12 months or whatever between contracts in the same place would be plenty of evidence that relocating to that place would have been pointless, and that you are likely to move locations again in the near future.

But, God knows.

HMRC being deliberately vague again hoping people will be cautious and not claim, they have a bit of a track record for this.

[dang65]

I presume the idea is that if you are working in one place continuously for more than two years then you are really expected to either relocate to that place or accept the costs for yourself because it is entirely your choice not to move there.

Which kind of makes sense.

If that is the idea then I would have thought that a gap of 12 months or whatever between contracts in the same place would be plenty of evidence that relocating to that place would have been pointless, and that you are likely to move locations again in the near future.

But, God knows.

[gingerjedi]

How long should a break be? I've just started back in Bristol after a 15 month break, is that long enough to reset the clock?

BTW I didn't claim for the last year the first time round as I was there for 3 years so effectively I haven’t claimed travel to Bristol for 27 months, would this make a difference?

[Bertie]

Can you imagine during the current climate (MP's expenses and mass unemployment etc) if something like this ended up in court today ?

You're a contractor who has successfully sold your services during a 2 year contract and have secured your next contract that just happens to be in the same town, 200 miles away from your home - not something you planned (as can be proved with evidence of many applications to many different companies throughout the UK and abroad) but you need to sell your services to whoever will pay, wherever they are.

Then the HMRC takes you to court to fine you 2+years expenses plus interest.

The Telegraph would have a field day

[LisaContractorUmbrella]

The rule is that, if your journey does not change 'significantly' the 24 month rule will apply - unfortunately there is no definition for 'significant' so it is entirely subjective. It may be that an extra 15 miles could extend your journey time by 45 minutes - this could, IMHO, be considered significant.