Reply to: (Another) two year rule post

[northernladuk]

Personally, I'd see a journey from Bradford to Leeds as broadly the same journey, regardless of the precise location in Leeds, particularly if the journey cost is largely the same.

Ultimately, this is a matter of personal taxation as it affects whether any travel expenses you claim from YourCo are subject to tax/NI as a BIK or not. Its up to you to self-assess as both an employer (e.g. whether or not it needs to go on P11D) and as an employee/director on your self-assessment. Speak to your accountant and ask them their view.

Claim if you feel the journey is different enough and can argue your case if it ever came up in a compliance check with HMRC. There is no definitive answer.

This ^

Doesn't help that I am from Bradford and that area is all the same to me so slightly skews the situation but the last line nails it for me.

[TheCyclingProgrammer]

It's Bradford to Leeds.

However, if/when I move to Leeds I could commute by train rather than by car but I'm guessing a travel expense is a travel expense and it's still all about location.

Personally, I'd see a journey from Bradford to Leeds as broadly the same journey, regardless of the precise location in Leeds, particularly if the journey cost is largely the same.

Ultimately, this is a matter of personal taxation as it affects whether any travel expenses you claim from YourCo are subject to tax/NI as a BIK or not. Its up to you to self-assess as both an employer (e.g. whether or not it needs to go on P11D) and as an employee/director on your self-assessment. Speak to your accountant and ask them their view.

Claim if you feel the journey is different enough and can argue your case if it ever came up in a compliance check with HMRC. There is no definitive answer.

[TheCyclingProgrammer]

But people are saying London counts as the same location and that can easily be 15 miles apart.

Well you didn't say anything about what location your contracts were in.

Yes, London as a whole *can* be considered the same location but more context is needed. A commute from one side of London to the other could be significantly more expensive and costly than a journey locally on the other side of London. On the other hand, for somebody travelling from 2 hours away by train, the journey to London and the cost may not be broadly different wherever you are actually working in London.

[Gaz_M]

It's all about perception as there are no hard and fast rules. I would like to know more about the circumstances of the role but IMO 15 miles is a bit close for me to reset the clock personally. Devil is in the details though. If that 15 miles kept me in the same geographic location i.e both gigs were in Manchester then no I wouldn't. If one was in Manchester the other in Cheshire maybe I would think about it.

Accountants don't really care that much, they know some level of mileage will reset it and they have probably never seen it investigated but it's not their risk really.

It's Bradford to Leeds.

However, if/when I move to Leeds I could commute by train rather than by car but I'm guessing a travel expense is a travel expense and it's still all about location.

[northernladuk]

My current contract has been extended until July next year (which takes me up to exactly 2 years). I've been told they want me for one extra year from then but that will be at another location (approx. 15 miles away). I contacted SJD & they said that was fine to continue to claim all travel expenses.

According to this, and other threads on the subject, that shouldn't be allowed.

I'm confused.

It's all about perception as there are no hard and fast rules. I would like to know more about the circumstances of the role but IMO 15 miles is a bit close for me to reset the clock personally. Devil is in the details though. If that 15 miles kept me in the same geographic location i.e both gigs were in Manchester then no I wouldn't. If one was in Manchester the other in Cheshire maybe I would think about it.

Accountants don't really care that much, they know some level of mileage will reset it and they have probably never seen it investigated but it's not their risk really.

[TykeMerc]

But people are saying London counts as the same location and that can easily be 15 miles apart.

True, but if that final 15 miles is on the end of a 100 mile trip the argument is that the trip is substantially the same, a local stop or two on the train or underground isn't that different that the clock gets re-set.

As an example people working in the financial district of the city or at multiple Canary Wharf clients should stop expensing travel as soon as their expectation is that they will cross 24 months at that general location.

[Gaz_M]

Unless I'm mistaken it's because you'll now be going to a different location.

Because it's about location, not contract or client. Extension at new location means 24 month rule doesn't bite.

But people are saying London counts as the same location and that can easily be 15 miles apart.

[TheCyclingProgrammer]

My current contract has been extended until July next year (which takes me up to exactly 2 years). I've been told they want me for one extra year from then but that will be at another location (approx. 15 miles away). I contacted SJD & they said that was fine to continue to claim all travel expenses.

According to this, and other threads on the subject, that shouldn't be allowed.

I'm confused.

Because it's about location, not contract or client. Extension at new location means 24 month rule doesn't bite.

[Markerton]

My current contract has been extended until July next year (which takes me up to exactly 2 years). I've been told they want me for one extra year from then but that will be at another location (approx. 15 miles away). I contacted SJD & they said that was fine to continue to claim all travel expenses.

According to this, and other threads on the subject, that shouldn't be allowed.

I'm confused.

Unless I'm mistaken it's because you'll now be going to a different location.

[Gaz_M]

My current contract has been extended until July next year (which takes me up to exactly 2 years). I've been told they want me for one extra year from then but that will be at another location (approx. 15 miles away). I contacted SJD & they said that was fine to continue to claim all travel expenses.

According to this, and other threads on the subject, that shouldn't be allowed.

I'm confused.

[TheFaQQer]

Simples, resign from that umbrella company and take a new contract (up to 1 day before 2 years) with another umbrella - they will have no knowledge of the first (revoked) contract. Talk with your feet, dont pay an umbrella company that plays silly.

I don't think it's playing silly - they know that the contract is going to put the OP there for more than two years, so they are right to disallow any expenses. The OP knows the same.

Is there an expectation that the work will continue for more than two years? Yes. So the expenses shouldn't be allowed.

[LisaContractorUmbrella]

Yes it would... You already said that revising the end date to be within 24m is legit. So if the OP moved to your company then you would allow it, and the OP could continue to claim up until end of the new contract?

Oh sorry see what you mean - yes he could

Another workaround, if you believe the umbrella policy is wrong, is to reclaim the tax via personal self-assessment or P87.

But the problem is this (whether or not the umbrella is changed):
... which effectively only kicks in at the end of contract, once the intentions are clear, I think. So the OP has time to prepare.

Travel and subsistence are only allowable if the OP will have more than one assignment whilst in the employment of the umbrella company; if he is already looking for a perm job to move to once the assignment's finished then his intention is not to have more than one assignment and therefore the T&S would be disallowed.

[scope]

I phoned them this morning to remove the lock on my expenses and they stated that "because the original end date was past the two year mark, they're unable to remove the lock even though it's now before then." I asked why, and they stated it's because HMRC would see this as "playing the system," and they "wouldn't be happy doing that."

Simples, resign from that umbrella company and take a new contract (up to 1 day before 2 years) with another umbrella - they will have no knowledge of the first (revoked) contract. Talk with your feet, dont pay an umbrella company that plays silly.

[Contreras]

moving umbrella would make no difference to the OP's situation as his location won't have changed

Yes it would... You already said that revising the end date to be within 24m is legit. So if the OP moved to your company then you would allow it, and the OP could continue to claim up until end of the new contract?

Another workaround, if you believe the umbrella policy is wrong, is to reclaim the tax via personal self-assessment or P87.

But the problem is this (whether or not the umbrella is changed):

and, if he's thinking of going back to permieland then he wouldn't be able to claim expenses through the new umbrella anyway as his intention would only be to have the one assignment as their employee

... which effectively only kicks in at the end of contract, once the intentions are clear, I think. So the OP has time to prepare.

[LisaContractorUmbrella]

I'm not sure that you do. It wasn't being suggested to set up a Ltd.

With a new umbrella - one that knew nothing of the original contract date - it's being suggested that you could claim expenses without being accused of "playing the system".

However you might then (or might already, with the existing umbrella) fall foul of the single-location-per-employment gotcha, meaning the expenses become taxable once you leave. Sorry to be the bearer of bad news if that proves to (already) be the case.

You are right Contreras - moving umbrella would make no difference to the OP's situation as his location won't have changed and, if he's thinking of going back to permieland then he wouldn't be able to claim expenses through the new umbrella anyway as his intention would only be to have the one assignment as their employee