Reply to: 24 month Rule - Travel Expenses

[cojak]

If you read Mal's post properly, his hint is to work out the travel costs and add 20% to those, and ask for that kind of increase.

He is not advocating a 20% per day rise, although well done to cojak for getting that one

I didn't get a pay rise on an existing contract. I negotiated the rate on the next contract.

The client grabbed me when they knew I was available, the agent is just there to manage my timesheets and payments.

[SueEllen]

On this subject, is there any issue with claiming for a season ticket?

I read somewhere that HRMC might claim that it wasn't 'exclusively' for business if I was possibly able to use it at weekends, etc?

Ideally I would just expense a yearly season ticket. As it is a return to the City, private use would be likely zero.

While some on here say you can't I suggest you have a look and a read of HMRC guides properly.

There is no problem having season tickets if you can prove they cost less than daily return journeys for your 5 days a week of travel to your temporary place of work.

Just remember though if you get a refund for it as your work stops you need to return the money to the company.

[richto]

On this subject, is there any issue with claiming for a season ticket?

I read somewhere that HRMC might claim that it wasn't 'exclusively' for business if I was possibly able to use it at weekends, etc?

Ideally I would just expense a yearly season ticket. As it is a return to the City, private use would be likely zero.

[SueEllen]

Fascinating as all this is, the actual wording is "substantially different". Getting to a different main line terminus , for example, would probably do it (as in Paddington vs Victoria, not Clapham Junction vs Waterloo) .

I hope people don't take your post literally as I know some changes in main line terminus won't work for some people as they aren't "substantially different" journeys due to where they live/are based i.e. Euston vs Kings Cross, Waterloo vs Victoria

[TheFaQQer]

I agree that 20% increase is not straightforward.

If you read Mal's post properly, his hint is to work out the travel costs and add 20% to those, and ask for that kind of increase.

He is not advocating a 20% per day rise, although well done to cojak for getting that one

[northernladuk]

Yes, travel and taxation is my business, but it affects whether it's worth me taking the contract. Of course, if you're just one of many who can do it, you've not got a leg to stand on, but if they're particularly after you - it's just a point for negotiation. My expenses have increased, I can't afford to continue the contract at current rates.

That's the argument I used when the exchange rate collapsed. It simply wasn't worth my while continuing. I didn't protect my rate wrt currency completely, but I did manage to get them to split the difference.

This is very true, my point was don't go in and say 'I am over the 24 month rule so can't re-imburse my travel. I would like a raise'. Highly unprofessional and puts your request on the laughable pile. Talking about costs and delivery is the way to go.

[northernladuk]

What happens with the 24 month rule if you are offered an extension that would take you over 24 months but DON'T take it, are you allowed to claim for the rest of the contract as long as its still under 24 months?

Yes as you KNOW you are not going to be there over 24 months because you turned it down.

Also it probably won't affect the WHOLE contract, it would be just from the end of the last extension before you knew you would be there over 24 months... if that makes sense.

[SimonMac]

What happens with the 24 month rule if you are offered an extension that would take you over 24 months but DON'T take it, are you allowed to claim for the rest of the contract as long as its still under 24 months?

[NotAllThere]

I am not sure how cojak did it but some of the guys here tried to do it by mentioning the 24 month rule and how they would lose out. Client told them that their travel and taxation is their business and the client would not fund the contractors travel. Totally wrong way of going around it.
...

Yes, travel and taxation is my business, but it affects whether it's worth me taking the contract. Of course, if you're just one of many who can do it, you've not got a leg to stand on, but if they're particularly after you - it's just a point for negotiation. My expenses have increased, I can't afford to continue the contract at current rates.

That's the argument I used when the exchange rate collapsed. It simply wasn't worth my while continuing. I didn't protect my rate wrt currency completely, but I did manage to get them to split the difference.

[dagenheis]

I am not sure how cojak did it but some of the guys here tried to do it by mentioning the 24 month rule and how they would lose out. Client told them that their travel and taxation is their business and the client would not fund the contractors travel. Totally wrong way of going around it.



To say you read up on this your grasp on the concept is pretty tenuous. I believe Cojak put the bit you are asking about in red to make it nice and clear for you. It is about the location. You could have 300 clients in roughly the same location. It doesn't matter. The fact you are in that location means the clock keeps ticking and you cannot claim AS SOON AS YOU KNOW you are going to be there 24 months. 19 monthis in and a 6 month renewal means you have to stop claiming at 19 months.

I hate to ask but do you understand the 40% concept?

I suggest a re-read of the links to the right and do a search on here/google.

I agree that 20% increase is not straightforward.

However, it depends on your own muscle power in terms of where your role fits within the client's business needs. It is relatively more difficult for larger clients where they don't want to set a precedent for other agencies/contractors. I know they are willing to increase by 10%, which is not too bad if I really want to be part of the project for another 6 months.

Yeah, I think, I glossed over the 'location' concept . Your response is crystal clear regarding my particular scenario! I will also read the original article again.. thanks.

[LisaContractorUmbrella]

Sorry folks, I was traveling for last few days and did not get a chance to follow the thread.

Thanks everyone for responses.


@Cojak
Yes, I have already thought about increasing the daily rate by x% to compensate for the expenses. I have kept that as an option if we discuss renewal.

To be clear, your comments regarding location are only relevant if I decide to stay with the same client beyond two year period. Is that right?

If i find a new contract with another client who even happens to be in the same distance (or even same technology park), would the aforementioned location principle still apply? Or finding a new client will reset the travel expenses clock anyway.

For fear of repeating Cojak It has everything to do with location - it is the location of the client's premises and not the client themselves that is important so, no, finding another client in the same location will not reset the clock

HTH

[northernladuk]

@Cojak
Yes, I have already thought about increasing the daily rate by x% to compensate for the expenses. I have kept that as an option if we discuss renewal.

I am not sure how cojak did it but some of the guys here tried to do it by mentioning the 24 month rule and how they would lose out. Client told them that their travel and taxation is their business and the client would not fund the contractors travel. Totally wrong way of going around it.

To be clear, your comments regarding location are only relevant if I decide to stay with the same client beyond two year period. Is that right?

If i find a new contract with another client who even happens to be in the same distance (or even same technology park), would the aforementioned location principle still apply? Or finding a new client will reset the travel expenses clock anyway.

To say you read up on this your grasp on the concept is pretty tenuous. I believe Cojak put the bit you are asking about in red to make it nice and clear for you. It is about the location. You could have 300 clients in roughly the same location. It doesn't matter. The fact you are in that location means the clock keeps ticking and you cannot claim AS SOON AS YOU KNOW you are going to be there 24 months. 19 monthis in and a 6 month renewal means you have to stop claiming at 19 months.

I hate to ask but do you understand the 40% concept?

I suggest a re-read of the links to the right and do a search on here/google.

[dagenheis]

No. It has nothing to do with your company. And it has nothing to do with contracting or permanent employment.

It has EVERYTHING to do with location.

If you have been there 24 months and spent over 40% of your time there (and 1 day a week WFH still makes it over 40%), then you will not be able to claim once you know that your contract will take you over 24 months.

And the location can mean anywhere in the City of London (or close to it) or similar.

I would say that 50 miles and you can argue it but I've heard people being challenged for working along the M4 corridor between Bristol, Swindon and London.

The only way you can go back is to go to another contract for 6 - 12 months* and then return - that 'resets the clock'.

I would only feel safe if I moved from London to Manchester, Leeds, Birmingham, or Bristol.

*I recommend 9 - 12 months, others recommend 6 months.

So none of your suggestions for avoiding it will work.

Sorry folks, I was traveling for last few days and did not get a chance to follow the thread.

Thanks everyone for responses.


@Cojak
Yes, I have already thought about increasing the daily rate by x% to compensate for the expenses. I have kept that as an option if we discuss renewal.

To be clear, your comments regarding location are only relevant if I decide to stay with the same client beyond two year period. Is that right?

If i find a new contract with another client who even happens to be in the same distance (or even same technology park), would the aforementioned location principle still apply? Or finding a new client will reset the travel expenses clock anyway.

[cojak]

The other point, of course, is that there are no rules about what expenses you can claim, only about what expenses you have toIf your renewal takes you over the two year rule, work out the extra cost to you (hint: it's about 20% on top of of your travel costs) and negotiate it into your rate at renewal. You're supposed to be a business, so act like one: your client has just increased your cost of sales, so pass it on, just like Tesco.

Which is exactly what I did. I wasn't going to reject THE contract that I'd been planning for the last year just because of this rule. I just negotiated an extra 20% pd.

[malvolio]

Fascinating as all this is, the actual wording is "substantially different". Getting to a different main line terminus , for example, would probably do it (as in Paddington vs Victoria, not Clapham Junction vs Waterloo) . Working in Cardiff and Reading from my base in Bristol would count - roughly the same journey time but significantly different destinations. If the difference isn't clear - Farringdon one week, Barbican the next - you're probably not going to win that one.

The other point, of course, is that there are no rules about what expenses you can claim, only about what expenses you have to treat as earned income. If your renewal takes you over the two year rule, work out the extra cost to you (hint: it's about 20% on top of of your travel costs) and negotiate it into your rate at renewal. You're supposed to be a business, so act like one: your client has just increased your cost of sales, so pass it on, just like Tesco.

All assuming of course, that you want to take the risk of being proved wrong in order to save a few hundreds out of a multi-thousand pound contract. Life's too short.