24 Month Rule

[expat]

Agreed. But that not what I said is it?

Key words: "Changing an actual employer does reset the clock".

The scenario I described is:-

ASB works for EDS and they send him to an office in the city for 23 months. He resigns and goes to work for Accenture, they send him to an office in the city. I believe the change of actual employer does reset the clock (but this is not covered in 490).

I was in exactly this situation in my investigation in 1995 and the inspector raised comment but did not disallow it - might have been an error on his part though. At this point the period was 12 months not the 24 months it was changed to in 1998.

If I am not mistaken then switching umbrellas is a change of actual employer. The taxman will get his arse in his handbag but would possibly have to use Ramsey to disallow it.

Very clear. But my respect for Hector and his claws would diminish considerably if he let you keep up the same activity but pretend not to just by starting another Ltd Co.

[ASB]

Eloise is not entitled to tax relief for her travel from home to these workplaces, because the nature of her work is such that she expects to work continuously in the ‘Square Mile’ albeit on the premises of different banks. So her travel from home to work will be broadly the same every day, year in year out (see paragraph 4.6).

Agreed. But that not what I said is it?

Key words: "Changing an actual employer does reset the clock".

The scenario I described is:-

ASB works for EDS and they send him to an office in the city for 23 months. He resigns and goes to work for Accenture, they send him to an office in the city. I believe the change of actual employer does reset the clock (but this is not covered in 490).

I was in exactly this situation in my investigation in 1995 and the inspector raised comment but did not disallow it - might have been an error on his part though. At this point the period was 12 months not the 24 months it was changed to in 1998.

If I am not mistaken then switching umbrellas is a change of actual employer. The taxman will get his arse in his handbag but would possibly have to use Ramsey to disallow it.

[DaveB]

I'm not convinced. Changing an actual employer does reset the clock. Can't find the reference on HMRC site though

It's here

Page 12, Para 3.12, scroll down through the examples.....

Example
Eloise, a computer consultant, is the only employee of a company which she controls.
She is a specialist in banking systems.
She spends 18 months working full-time at the headquarters of a merchant bank in Lombard Street in the City of London. She then moves next door to design a new computer system for a different bank where she expects to stay working full-time for 22 months.

After that assignment she moves to work at a bank close by on Cheapside for
17 months.

Eloise is not entitled to tax relief for her travel from home to these workplaces, because the nature of her work is such that she expects to work continuously in the ‘Square Mile’ albeit on the premises of different banks. So her travel from home to work will be broadly the same every day, year in year out (see paragraph 4.6).

[expat]

I'm not convinced. Changing an actual employer does reset the clock. Can't find the reference on HMRC site though

No, it's geographical. Can't be arsed to find the reference though. But the City is an obvious pitfall - 1 location.

[ASB]

>I've heard there are ways round it; just don't know what they are yet.

Not really. If you are with a brolly, you could try changing to a different one, but if you were ever investigated Hector would present you with a tax bill, plus penalties.

I'm not convinced. Changing an actual employer does reset the clock. Can't find the reference on HMRC site though

[Mordac]

>I've heard there are ways round it; just don't know what they are yet.

Not really. If you are with a brolly, you could try changing to a different one, but if you were ever investigated Hector would present you with a tax bill, plus penalties.

[absoft]

I've heard there are ways round it; just don't know what they are yet.

[Cowboy Bob]

It's not the duration of the contract anyway necessarily. The law says that if you know that you're going to be there longer than 2 years that expenses cannot be claimed.

[DaveB]

Does anyone know what the rules are for resetting the 24-month limit on working at one location (as far as claiming travelling expenses against tax is concerned)? For instance is it enough to leave after 23 months 30 days and then start a new contract at the same place, do the same but with a different brollie or Ltd company name, do the same but have a month or two break, get another job for a couple of weeks in B&Q or McDonalds and then restart contracting with the same company etc. Or is it like 'parking' i.e. duration limited to 24 months and no return within 24 months?

The restriction is based on your geopgraphical location, not your contractual situation.

IIRC you need to work at a geographically different site 4 a minimum of 6 months to reset the counter.

Alternatively drop your attendance at the location concerned to <40%. That also gets you around it. If you can work from home 3 days a week and only be in the office for the other two you *should* be ok.

[expat]

Does anyone know what the rules are for resetting the 24-month limit on working at one location (as far as claiming travelling expenses against tax is concerned)? For instance is it enough to leave after 23 months 30 days and then start a new contract at the same place, do the same but with a different brollie or Ltd company name, do the same but have a month or two break, get another job for a couple of weeks in B&Q or McDonalds and then restart contracting with the same company etc. Or is it like 'parking' i.e. duration limited to 24 months and no return within 24 months?

Others will doubtless have more knowledge, but it seems to me that nothing you suggest would be allowed to restart the clock. Worse even than you seem to suspect: if (for example) you have 1 contract after another at completely different clients in the same location, they will count together. In this respect, the City of London (for example) counts as only 1 location.

Which makes sense: the point is that, if you work in one place (geographically) long-term, it is up to you to live close to it or take the consequences yourself of not doing so.

[absoft]

Does anyone know what the rules are for resetting the 24-month limit on working at one location (as far as claiming travelling expenses against tax is concerned)? For instance is it enough to leave after 23 months 30 days and then start a new contract at the same place, do the same but with a different brollie or Ltd company name, do the same but have a month or two break, get another job for a couple of weeks in B&Q or McDonalds and then restart contracting with the same company etc. Or is it like 'parking' i.e. duration limited to 24 months and no return within 24 months?