Reply to: Two years rule – contract date

[JamJarST]

Just pointing out that 'as soon as you are aware' is pretty vague.

No - no problem with expenses thanks.

How is that vague?? As soon as you are aware seems clear to me.

[psychocandy]

Doesn't mean you know the contract will eb extended



Not so. Which bit of "as soon as you are aware" are you having problems with?


Of course you do. You haven't broken the 24 month rule so you can claim back the overpaid taxes, if you've actually paid any via your SAR.

I assume you're not one of those who confuses YourCo paying business expenses with you paying tax on expenses as a BIK...?

Just pointing out that 'as soon as you are aware' is pretty vague.

No - no problem with expenses thanks.

[northernladuk]

Sorry, it sounded like good question in my head at the time...

I really must stop drinking on a Friday lunchtime.

Forget that, invite us and get them in. We want some of that!!

[Mr.Whippy]

WTF? What are you on about? If you know you are not going to take the extension then you won't be there 2 years will you???

Sorry, it sounded like good question in my head at the time...

I really must stop drinking on a Friday lunchtime.

[LisaContractorUmbrella]

WTF? What are you on about? If you know you are not going to take the extension then you won't be there 2 years will you???

It's all going on this afternoon

Freaky Friday

[northernladuk]

I'd agree with this, whether it's right or wrong I don't know.

Also if the client indicates to you that they want you longer than 2 years but you know 100% that you won't be accepting a further extension that takes you beyond 2 years, what do you do then?

WTF? What are you on about? If you know you are not going to take the extension then you won't be there 2 years will you???

It's all going on this afternoon

[malvolio]

Yeh but you can take it too far. What if you hear a rumour that you might be extended?

Doesn't mean you know the contract will eb extended

I'd say until the contract is signed and sealed you're not aware that its going to be extended even if the client says so. What if it all falls through?

Not so. Which bit of "as soon as you are aware" are you having problems with?

Potentially you could stop claiming expenses, then 3 months later contract extension falls through so no 24 month rule now. What to do, go back and claim those expenses now?

Of course you do. You haven't broken the 24 month rule so you can claim back the overpaid taxes, if you've actually paid any via your SAR.

I assume you're not one of those who confuses YourCo paying business expenses with you paying tax on expenses as a BIK...?

[Mr.Whippy]

I'd say until the contract is signed and sealed you're not aware that its going to be extended even if the client says so. What if it all falls through?

I'd agree with this, whether it's right or wrong I don't know.

Also if the client indicates to you that they want you longer than 2 years but you know 100% that you won't be accepting a further extension that takes you beyond 2 years, what do you do then?

[psychocandy]

The rules state " as soon as you are aware". This is personal taxation, after all, not corporate fudge-u-like.

Yeh but you can take it too far. What if you hear a rumour that you might be extended?

I'd say until the contract is signed and sealed you're not aware that its going to be extended even if the client says so. What if it all falls through?

Potentially you could stop claiming expenses, then 3 months later contract extension falls through so no 24 month rule now. What to do, go back and claim those expenses now?

[malvolio]

Absolutely. Doesn't get anymore black and white than this. Question is what can you get away with. When he tells you or when you sign the contract.

you're by the way....

The rules state " as soon as you are aware". This is personal taxation, after all, not corporate fudge-u-like.

[northernladuk]

But then again, say your half way (Been at client 18 months say) through a 6 month extension which takes you up to 21 months say. What happens if the client comes to talk to you and tells you they plan to extend you by 6 months next time as well. This means you now know you're next extension will take you past 24 months, so should you stop claiming immediately?

Absolutely. Doesn't get anymore black and white than this. Question is what can you get away with. When he tells you or when you sign the contract.

you're by the way....

[psychocandy]

We get a lot of odd questions on here but to understand what is two years less a day and what is two years is..well... erm.. unique??

You are in a lucky situation that the client will allow you to change the dates to suit you but it does raise an interesting question. By fudging the dates gets you off on paper but if you KNOW you are going to be there longer then you cannot claim from the day you knew.

The question raised is what constitutes knowing. You could argue you don't know if the client will give you an extension after this one. We all know unless the contract is signed and the ink is dry you have nothing but if you are fully aware the client needs you and contract dates are a distraction not a directive then you know you will be there 24 months. I would guess the answer is what is on paper rules but there is the chance the client could shaft you on in an investigation and admit it was agreed you were needed for longer but the contract was set at that date by request of the contractor.

Good point. If you know its going to be longer but manually change the date to suit then its a bit dodgy.

But whos going to know?

But then again, say your half way (Been at client 18 months say) through a 6 month extension which takes you up to 21 months say. What happens if the client comes to talk to you and tells you they plan to extend you by 6 months next time as well. This means you now know you're next extension will take you past 24 months, so should you stop claiming immediately?

I'm lucky in that my current client cant get their arse into gear until about 2 days before end of contract so I can never say I know I'll be extended.

[northernladuk]

You shouldn’t be claiming tax relief on your travel expenses.

24 Month Rule :: Contractor UK

Just as a matter of interest, do you really want to help?

Bearing in mind the actual question I think JJ was doing you a favour checking you were aware. He also answered your question.

[northernladuk]

My first contract with the current client started on 8th Nov 2010. I am going to sign a renewal contract soon. To be able to not break the two years rule, should the new contract ends on 8th Nov 2012 or 7th Nov 2012?

Thank you in advance.

We get a lot of odd questions on here but to understand what is two years less a day and what is two years is..well... erm.. unique??

You are in a lucky situation that the client will allow you to change the dates to suit you but it does raise an interesting question. By fudging the dates gets you off on paper but if you KNOW you are going to be there longer then you cannot claim from the day you knew.

The question raised is what constitutes knowing. You could argue you don't know if the client will give you an extension after this one. We all know unless the contract is signed and the ink is dry you have nothing but if you are fully aware the client needs you and contract dates are a distraction not a directive then you know you will be there 24 months. I would guess the answer is what is on paper rules but there is the chance the client could shaft you on in an investigation and admit it was agreed you were needed for longer but the contract was set at that date by request of the contractor.

[JamJarST]

You shouldn’t be claiming tax relief on your travel expenses.

24 Month Rule :: Contractor UK

Just as a matter of interest, do you really want to help?

Yes I was just checking in case you thought, like many do that it has anything to do with IR35.