Reply to: 24 months + Contract renewal

[LisaContractorUmbrella]

Suppose:

1 x contract up to 24 months.
Renewal possible for post 24 months...
Choice of office location available to travel to.
Therefore, change location in NEW contract to NEW location (with same client) and start another xx months (<= 24) contract and claim expenses for travelling to new location?

It would all depend on whether or not you were at the new location all the time AND whether the new location caused a significant change to your travelling time. If you were at the original location some of the time and at the new location some of the time you would then have to look at the 40% rule (if you spend more than 40% of your time over a rolling 24 month period then the 24 month rule is still invoked). The distance travelled or time travelling would also have to change significantly - office 1 Birmingham and office 2 London you would be OK but both offices in London would be a different story.

[northernladuk]

Suppose:

1 x contract up to 24 months.
Renewal possible for post 24 months...
Choice of office location available to travel to.
Therefore, change location in NEW contract to NEW location (with same client) and start another xx months (<= 24) contract and claim expenses for travelling to new location?

Yup, perfect situation. If you can sort that out you on a better gig than me. My client wouldn't let me change offices.

Note this is geographical location which is the grey bit. 5 miles away isn't a geographical change. God knows what is though.

[RockyBalboa]

Let me put a bib on you and open your special food so I can feed it to you, there is a good little soldier....

Firstly... It is from the moment you know you are going to be over 24 months. Not POST 24 months. This has been said more than enough times now....

You could get your contract amended to say your new location is up my lilly white ass but if you are not going to travel there it doesn't mean squat. If you continue to travel to your client at the same place you location is still there. It doesn't matter what it says on your contract. If you travel to the same location for more than 40% of the time or 2 years your caught (from the moment you know of course).

If you can change location (physically), out of the geographic area not across the road, then the clock starts again.

Read the damn guides and do a search. Jesus. Why people will not do a bit of research when it comes to potentially falling foul of HMRC I will never know.

I would like to know what the repercussions of changing your contract to not reflect your working situation for personal gain is though. Has to be some legal come back on that surely?

Suppose:

1 x contract up to 24 months.
Renewal possible for post 24 months...
Choice of office location available to travel to.
Therefore, change location in NEW contract to NEW location (with same client) and start another xx months (<= 24) contract and claim expenses for travelling to new location?

[northernladuk]

So, post 24 months if you could get the contract ammended to reflect another office of the client?

Let me put a bib on you and open your special food so I can feed it to you, there is a good little soldier....

Firstly... It is from the moment you know you are going to be over 24 months. Not POST 24 months. This has been said more than enough times now....

You could get your contract amended to say your new location is up my lilly white ass but if you are not going to travel there it doesn't mean squat. If you continue to travel to your client at the same place you location is still there. It doesn't matter what it says on your contract. If you travel to the same location for more than 40% of the time or 2 years your caught (from the moment you know of course).

If you can change location (physically), out of the geographic area not across the road, then the clock starts again.

Read the damn guides and do a search. Jesus. Why people will not do a bit of research when it comes to potentially falling foul of HMRC I will never know.

I would like to know what the repercussions of changing your contract to not reflect your working situation for personal gain is though. Has to be some legal come back on that surely?

[RockyBalboa]

Please read the guides. This is basic knowledge.

24 months is based on your location NOT your ltd or who you work for or contracts.

As long as you are in the geographical area regardless of how many clients you work for, for 24 months (from date you know of course) the clock is ticking.

Read the guides to the right.

So, post 24 months if you could get the contract ammended to reflect another office of the client?

[Clare@InTouch]

I knew a guy (developer) in one of my previous gigs who had been with the client (direct, no pimp) for over eight years as a Ltd co contractor, he was best mates with the current CTO, going back many years working for same client then it got bought out. When asked about IR35, he was very dismissive of it, but I did wonder what would happen if he got investigated. A few years with same client, fair enough but eight years?

qh

I agree that time is neither here nor there for IR35 in most cases.

It does remind me of the whole Dragonfly case though (there was another long one that lost too - Battersby I think) - and whilst I don't think length of contract is a deciding factor, it does make arguing you're not part & parcel of the firm harder, along with lack of MOO. The client would surely get to the point where they just assume you're going to accept a renewal, and you assume they will offer one. This is the extreme though, where you're talking 5 years or longer! And you still have the magic Control & Substitution to fall back on.

[northernladuk]

Post 24 months, could he operate under a new LTD and claim travel expenses all over again?

Please read the guides. This is basic knowledge.

24 months is based on your location NOT your ltd or who you work for or contracts.

As long as you are in the geographical area regardless of how many clients you work for, for 24 months (from date you know of course) the clock is ticking.

Read the guides to the right.

[RockyBalboa]

Post 24 months, could he operate under a new LTD and claim travel expenses all over again?

[quackhandle]

I knew a guy (developer) in one of my previous gigs who had been with the client (direct, no pimp) for over eight years as a Ltd co contractor, he was best mates with the current CTO, going back many years working for same client then it got bought out. When asked about IR35, he was very dismissive of it, but I did wonder what would happen if he got investigated. A few years with same client, fair enough but eight years?

qh

[northernladuk]

Although the length of time you are in a contract has no bearing on IR35, 2 year + contracts do give a hint to HMRC that you may not be in business on your own account.

I would say the above comment is not true as it is worded but I do see around me many of the people that have been here on long stints are either ex employees of the client who still act like they are still employed and a number of people who have taken their eye of the ball and have started to slip in to a bad routine. I would argue a number of contractors make themselves look like 'hidden employees' in long contracts (as shown in the JLJ case) yes, but as a hint to HMRC I would disagree.

[Alan @ BroomeAffinity]

Although the length of time you are in a contract has no bearing on IR35, 2 year + contracts do give a hint to HMRC that you may not be in business on your own account.

Hearsay, m'lud.

[v8gaz]

Although the length of time you are in a contract has no bearing on IR35, 2 year + contracts do give a hint to HMRC that you may not be in business on your own account.

citation needed ...

[krytonsheep]

Although the length of time you are in a contract has no bearing on IR35, 2 year + contracts do give a hint to HMRC that you may not be in business on your own account.

[LisaContractorUmbrella]

Hi,

I did some research on the other posts but could not find an exact answer to my queries so any help would be really appreciated.

I have been contracting with a client using my limited company for 20 months now. My current contract expires in July (leading to 24 months). There is a possibility that the client will renew for another year which I would want to instead of going for another contract at this point.

I checked with my accountants and was told that it is not IR35 compliant to work at the same client for more than 24 months but the posts here seem to suggest that the only difference is in the claims for travel expenses to the client site. So a bit confused whether it is an IR35 issue or a expense claim issue?

Also, a few more quick queries:
- My role in the new contract could be slightly different - additional management responsibilities than before so does that have any bearing on whether the new contract is IR35?
- As part of my work I travel to different end customer locations for different projects - would those still be claimable? For e.g. taxi from home to a london office (my contract is for a location in Watford).
- Can I still claim other expenses such as office eqiupment, journals etc?

Thanks a ton for any advise - am slightly unsure whether to move to permanent roles or to an umbreall company because of this 24 month issue.

Regards,
KD1

1. What is your current role exactly?
2. How much of your time do you spend at other sites v. the main sites as this can have a bearing on the 24 month rule?
3. Yes you can claim for other expenses - the 24 month rule applies only to travel and accommodation.

[kingcook]

Thanks everyone. My current contract is deemed to be IR35 compliant by my accountants so am hoping that the extension beyond 24 months does not change anything on that front.

<snip>

Thanks for your help - I will pass these by my accountant once more - they are the largest in the UK for contractors so ideally should be knowing the IR35 rule!!

Seriously... do NOT trust your accountant to give you advice on whether your contract is IR35 friendly or not (god only knows why you are doing this anyway, considering that they original said your contract was not IR35 friendly because it took you over 24 months).

Get your contract checked (if renewed) by Qdos or someone similar. You also need to ensure that your actual working practices reflect what is in the contract. Read the guides too (right hand side).