Reply to: IT Contractor help

[LisaContractorUmbrella]

Can't find it on CUK, though I'm sure I remember someone posting a link, but Accounting web seems to think it's OK, although no links to back it up

24 Month Rule - New Employer | AccountingWEB
IR35 24 month rule | AccountingWEB

The example "Eloise" in 490 where she moves banks specifically says she works for a company controlled by herself.

I think this might have been it - good find - still think it's wrong though That aside - moving from umbrella to umbrella will definitely not reset the 24 month clock

[mudskipper]

I vaguely remember it too but I also vaguely remember the point being argued - be interested if you find it - had a quick look but no luck

Can't find it on CUK, though I'm sure I remember someone posting a link, but Accounting web seems to think it's OK, although no links to back it up

24 Month Rule - New Employer | AccountingWEB
IR35 24 month rule | AccountingWEB

The example "Eloise" in 490 where she moves banks specifically says she works for a company controlled by herself.

[TheFaQQer]

what if you wound up your ltd company & started up a new one?

It would make no difference. It's about the person and the location.

The only way you get round it is by changing either the person, or the location, or both.

[AMH]

Don't recall that one, nor do I follow the concept. We're talking about taxation on personal income here; where that income comes from is irrelevant.

The only way it would work is if your new employer - note, not client - gave you a new permanent location some distance from your current place of work. I can't see that applying to contractors, or umbrella employees for that matter.

what if you wound up your ltd company & started up a new one?

[malvolio]

I vaguely remember it too but I also vaguely remember the point being argued - be interested if you find it - had a quick look but no luck

Don't recall that one, nor do I follow the concept. We're talking about taxation on personal income here; where that income comes from is irrelevant.

The only way it would work is if your new employer - note, not client - gave you a new permanent location some distance from your current place of work. I can't see that applying to contractors, or umbrella employees for that matter.

[LisaContractorUmbrella]

I vaguely remember someone posting a HMRC link somewhere that suggested a change of employer (not client) does reset the clock... Will have a google later and see if I can track it down.

I vaguely remember it too but I also vaguely remember the point being argued - be interested if you find it - had a quick look but no luck

[AMH]

I vaguely remember someone posting a HMRC link somewhere that suggested a change of employer (not client) does reset the clock... Will have a google later and see if I can track it down.

I was under the impression, if you worked in the same area for 2 different companies, then it is classed as continuous & you cant claim expenses.

[mudskipper]

The first umbrella is correct. The second umbrella is lying to get your business. They won't be in trouble if HMRC catches you, you will be the one with the fine.

If you don't think that there is much chance of HMRC catching you then you could move anyway.

I vaguely remember someone posting a HMRC link somewhere that suggested a change of employer (not client) does reset the clock... Will have a google later and see if I can track it down.

[malvolio]

Hello,

the point i'm trying to make is, should this rule not be applied when i've done 24 months ? and not in the pretence, contract work is a contract you can be let go anytime so in this case how do they know i will be 24months ?

in other words come 1st of july 2015 i would have been on this contract for 24 months.

thanks.

Like I said (several times), as soon as you expect the duration to extend over 24 months - i.e. you have a contract with an end date past that limit - and assuming you spend 40% or more of your time on site, the rule should be applied immediately. If it turns out that doesn't actually happen, then you can claim the tax relief retrospectively. Which is why I said (also several times) you need to continually review your position.

However, always remember the location element. If you get a new gig in the same general area, the rule calculation still applies.

[LisaContractorUmbrella]

Hello,

the point i'm trying to make is, should this rule not be applied when i've done 24 months ? and not in the pretence, contract work is a contract you can be let go anytime so in this case how do they know i will be 24months ?

in other words come 1st of july 2015 i would have been on this contract for 24 months.

thanks.

Unfortunately no - at the point at which you are aware that the contract will extend beyond 24 months travel and subsistence expenses are no longer allowable - those are the rules I'm afraid

[pippin123]

Hello,

the point i'm trying to make is, should this rule not be applied when i've done 24 months ? and not in the pretence, contract work is a contract you can be let go anytime so in this case how do they know i will be 24months ?

in other words come 1st of july 2015 i would have been on this contract for 24 months.

thanks.

[malvolio]

So in that case, it looks like it is only on the first contract that she may legitimately consider travel expenses (if she had been working outside of London prior to that, and had no expectation of being continuously working in the City at the time she took the first contract.)

No. Perhaps go and read the sticky on this subject as to why. However, the point the rule applies is when you know for certain or have a reasonable expectation that you will breach the 24 month/greater than 40% parameter. If you have an initial 12 month gig in the City, then two months in Oxford then find yourself back in the City for another 12 month contract, you then immediately exceed the 24 month rule. It's got nothing to so with the original intention.

The point - as it says in the sticky - is that it is a rolling window; you have to reassess it regularly and take the appropriate action.

[jjdarg]

Travel expenses: travel for necessary attendance: definitions: temporary workplace: example

explaining the 24 month rule when working in the same area, but for different clients.

So in that case, it looks like it is only on the first contract that she may legitimately consider travel expenses (if she had been working outside of London prior to that, and had no expectation of being continuously working in the City at the time she took the first contract.)

[AMH]

Travel expenses: travel for necessary attendance: definitions: temporary workplace: example

explaining the 24 month rule when working in the same area, but for different clients.

[tractor]

...

My understanding of the 24 week rule is that would all be fine, but if after the break the contractor starts a new contract with a different client in the same location then they would not be able to claim any expenses for the new contract unless it is in a completely different location (where a location is considered a geographical area) e.g. if previous contract was in London and new contract also in London then a contractor can't continue to claim expenses but if the new contract is in Southampton the contractor can claim expenses (with 24 month rules now being applicable to the new location)

My understanding is that it's 24 MONTHS.

People giving advice also seem to miss that the criterial is 'beyond 24 months' so 4 contract of 6 months would not take you 'beyond' but a 5th one of course, would provided that the location had not changed materially and within the guidance during that time.