Reply to: 2 year rule question

[Wanderer]

Keep the receipts and if you leave before the end of 24 months then put in a claim for it all. If you go over 24 months then you throw the receipts out and don't claim. Simples.

[pmeswani]

As this seems to be a difficult question to answer, I would only be able to suggest keeping all receipts just in case, and if you do leave before 24 months, you could contact HMRC and explain the situation and hope they will work in your favour and then claim (if you can) at that point. HTH

[xoggoth]

The solution is to be insane and to have a firm expectation that you will be abducted by aliens in week 23.

[xoggoth]

the only examples are how a change in expectation brings you into the rule, not releases you from it

That sounds like our good old tax system.

[centurian]

All depends on how well you can argue "reasonable to assume, or is likely, that the employee will spend at that workplace".

If you've got a signed contract to say you will be there for 3 years, then the answer is probably no. It's a reasonable assumption that having signed a contract, you intend to honour it.

While at the back of your mind, you may think that you don't want to stay there for 3 years, it would be a hard sell to actually prove that this was your intention from the outset. One (extreme) example is where you sign another contract (around the same time as the first one) designed to start in 6 months, which would require you to give notice on the 3 year contract.

[Fred Bloggs]

Fair enough, but............. if I have a contract for (say) 3 years and I decide from day 1 that I am definately going to quit before 2 years then I can claim?

[centurian]

I can't see a problem in claiming for the full 24 months once you have definately decided that you will finish before the 24 months is reached.

EIM32080 - Travel expenses: travel for necessary attendance: definitions: temporary workplace: limited duration, the 24 month rule

The legislation is written in terms of the length of time that it is reasonable to assume, or is likely, that the employee will spend at that workplace. The effect of the rule is not altered where the expectation does not match the outcome

Amending the contract does not amend the previous expectation. At some point, the OP had a reasonable expectation (a signed contract) that it would go over 24 months - and at that point, expenses should stop (and did). Changing the contract doesn't change that original expectation.

The HMRC article does go on to cover change of expectations - but the only examples are how a change in expectation brings you into the rule, not releases you from it.

Whether HMRC would ask for any previously held signed contracts in an PAYE enquiry is another matter, but deliberately hiding such information could put the OP in the realm of tax evasion, not tax avoidance.

[malvolio]

Ta - but a small beer might ease the decision

Anyway - I might not need to leave - see what the next quack does - in which case it will be a large beer

Fair enough. Best of luck whichever way it goes.

[ctdctd]

It's small beer anyway, not really worth worrying about.

Ta - but a small beer might ease the decision

Anyway - I might not need to leave - see what the next quack does - in which case it will be a large beer

[Fred Bloggs]

I can't see a problem in claiming for the full 24 months once you have definately decided that you will finish before the 24 months is reached.

[malvolio]

Thanks all,

Malvolio, yes, if I do need to go then I'll complete notice before the 2 years are up.
Oh, and do a backdated claim for expenses only once I am sure I'll be terminating (yes, the contract...........)

Steven, contract will be the same as now so will be beyond the two year date. However, I would be using my notice clause and leaving before the two years are up.

So a bit of a grey area then?

Not that gray. If there is a dispute over it and the contractual details are unclear, the judgement will be based on the intent of the parties, so not a problem if you both agree about what was intended. If you have a documented notice period, the intent is very clear. Just keep all the relevant correspondence with the client.

It's small beer anyway, not really worth worrying about.

[ctdctd]

Thanks all,

Malvolio, yes, if I do need to go then I'll complete notice before the 2 years are up.
Oh, and do a backdated claim for expenses only once I am sure I'll be terminating (yes, the contract...........)

Steven, contract will be the same as now so will be beyond the two year date. However, I would be using my notice clause and leaving before the two years are up.

So a bit of a grey area then?

[jmo21]

As per Malvolio's previous post, as long as your contract has been amended to reflect this then there would be no problem with you claiming travel and subsistence again.

You have to have your contract amended? unlikely I would have thought. What if client co cancelled their project and had to let you go?

In either case they aren't going to amend your contract just to help you out with your expenses.

[Steven@Parasol]

Morning all,

Contract at current clientco was extended by a further year at the 18 month mark so I stopped claiming travel expenses from myco.

However, it seems possible that I may need to leave due to ill heath before the two years are up.
If I do, would it be reasonable to expense the last few months of travelling?

Won't save a lot of tax etc, but every little helps!

Ta

P.S.
Thanks to those at CUK who suggested I stay at clientco in a previous post - it all worked out

As per Malvolio's previous post, as long as your contract has been amended to reflect this then there would be no problem with you claiming travel and subsistence again.

[malvolio]

Morning all,

Contract at current clientco was extended by a further year at the 18 month mark so I stopped claiming travel expenses from myco.

However, it seems possible that I may need to leave due to ill heath before the two years are up.
If I do, would it be reasonable to expense the last few months of travelling?

Won't save a lot of tax etc, but every little helps!

Ta

P.S.
Thanks to those at CUK who suggested I stay at clientco in a previous post - it all worked out

It is based on you knowiing you will be there more than 24 months. If you aren't going to be, then expenses are still claimable. But just to be safe, be very sure that you will be terminating (no, not in that sense... ) early.