Confused Newbie regarding 24 month rule (yes another one)

[Scottt]

Hi I am very confused and would appreciate any help that the community can give me in clarifying my position.

I am a contractor and have been working with the same company through an agency for 2 years, I have no guarantee of work although the work has been enough to keep me from jumping ship.
I usually get told the week before what work I will have for the following week and I don't get paid if there is no work, The work involves a lot of travel as I cover most of the uk and Ireland and I normally spend between 1 and 2 days at any given site (I go and do work on other company's premises to deliver my company's product)

My agency has sent a new contract to my umbrella company for another year and my umbrella company have said as this is over the 2 year rule I can not claim for travel anymore.
As I am travelling to a different site with each job I thought that each work place would be a temporary place of work?
To give an example I could be in Newcastle on Monday, Aberdeen on Wednesday and Manchester on Thursday.

I had a look at the gov web site and it wasn't very clear, What i got from it - it is not the length of contract but the length of time at any given location?
Would I be right in my assumption that my assignment with my company could be broken down into each job is an assignment in it's own right? so therefor resets the 24 month rule with every job? (providing reasonable distance between the two)

I am also thinking of moving to a new Umbrella company and my agency have given me a list of the company's I can use - Giant, Payco and Zeva, Does anyone has experience of any of these ?

I hope I have given enough information and would like to say thanks in advance for any help or any links to help that the community can give to help me understand all of this.

Scott

[northernladuk]

There is a sticky covering this..

http://forums.contractoruk.com/accou...-nutshell.html

There are guides in the newbie section covering this

Contractor Expenses - How to claim Travel and other expenses via Limited Company or Umbrella

There are plenty of threads about it that cover most cases

https://www.google.co.uk/search?q=24...m=122&ie=UTF-8

There is google.

https://www.google.co.uk/search?q=24...m=122&ie=UTF-8

Anything I have missed?

[Wanderer]

Some great links from NLUK as usual.

Your case is a bit unusual, there are a few points to make and/or discuss.

Would I be right in my assumption that my assignment with my company could be broken down into each job is an assignment in it's own right? so therefor resets the 24 month rule with every job? (providing reasonable distance between the two)

To quote from HMRC Manual EIM32080: The test is whether the employee has spent, or is likely to spend, 40% or more of his or her working time at that particular workplace over a period that lasts, or is likely to last, more than 24 months

It sounds like you have not spent more than 40% of your time at one location over the past 24 months so I agree that you are probably right and the umbrella is probably wrong. It's about location, location, location rather than about the client you work for. You could have a dozen clients in the City of London over 24 months and you would be caught by the 24 month/40% rule but you could work at a dozen different locations around the country for a client based in the City of London and you would not be caught.

I am also thinking of moving to a new Umbrella company and my agency have given me a list of the company's I can use - Giant, Payco and Zeva, Does anyone has experience of any of these?

If you do this then don't tell the old umbrella you are leaving until after you have been paid because some of them like to pull silly stunts like disallowing your expenses retrospectively which may cause you a lot of hassle especially as in your case the expenses appear to be legitimate.

I am a contractor and have been working with the same company through an agency for 2 years, I have no guarantee of work although the work has been enough to keep me from jumping ship. I usually get told the week before what work I will have for the following week and I don't get paid if there is no work, The work involves a lot of travel as I cover most of the uk and Ireland and I normally spend between 1 and 2 days at any given site (I go and do work on other company's premises to deliver my company's product)

From the little you have told us, it sounds like it's clear that there is no obligation on you or the agency to offer or accept work (mutuality of obligation) and that you carry out the work in your own way, without the direction and control of your clients. This means you may have a strong case for being outside IR35 if you were to trade as a LTD company and there could be some big tax advantages. (Calculator here, tweak the daily rate until it matches your annual turnover).

If your turnover is > ~£30k/year then you may be better off incorporating as a LTD company...

[DirtyDog]

My agency has sent a new contract to my umbrella company for another year and my umbrella company have said as this is over the 2 year rule I can not claim for travel anymore.

Whether they are right or wrong is a moot point - they are your employer, so you need to conform to their expenses policy. If they aren't going to pay expenses for the journey then they will continue to pay that money as salary.

[Craig at Nixon Williams]

If they won’t pay you the expenses and your places of work are temporary (less than 40% of your time is spent there) then you could claim the mileage as an employment expense (through self-assessment) so that you save the tax on it – though this isn’t as tax efficient as being paid it in the first instance.

Note that if you do change entity (be it a different umbrella or limited) the 24 months does not reset if you are still based at the same location(s).

Hope this helps!
Craig

[LisaContractorUmbrella]

Whether they are right or wrong is a moot point - they are your employer, so you need to conform to their expenses policy. If they aren't going to pay expenses for the journey then they will continue to pay that money as salary.

No it isn't a moot point - an umbrella company, as with any other employer, must comply with HMRC rules on what can or cannot be claimed as an expense

[DirtyDog]

No it isn't a moot point - an umbrella company, as with any other employer, must comply with HMRC rules on what can or cannot be claimed as an expense

So, if HMRC rules say that something can be classed as an expense, an employer MUST reimburse that???

In my last permie job, mileage was paid to employees at 12p a mile. You could claim the difference between that and the HMRC rules on your own tax return, but the company expenses policy was that you got 12p a mile.

From what you say, the company was wrong, and they should have paid 45p a mile, which I don't believe to be correct.

[LisaContractorUmbrella]

So, if HMRC rules say that something can be classed as an expense, an employer MUST reimburse that???

In my last permie job, mileage was paid to employees at 12p a mile. You could claim the difference between that and the HMRC rules on your own tax return, but the company expenses policy was that you got 12p a mile.

From what you say, the company was wrong, and they should have paid 45p a mile, which I don't believe to be correct.

That's not what I said at all

[DirtyDog]

That's not what I said at all

I said that if your employer will not pay your expense, then it doesn't matter if they should or should not - being right is a moot point.

You said it wasn't a moot point because an umbrella company has to stick to HMRC rules on what can and cannot be claimed as an expense.

You point is irrelevant - whether the OP is right or wrong, if his employer will not pay the travel costs as an expense, then the only thing they can do is to correct that via their self assessment.

[LisaContractorUmbrella]

I said that if your employer will not pay your expense, then it doesn't matter if they should or should not - being right is a moot point.

You said it wasn't a moot point because an umbrella company has to stick to HMRC rules on what can and cannot be claimed as an expense.

You point is irrelevant - whether the OP is right or wrong, if his employer will not pay the travel costs as an expense, then the only thing they can do is to correct that via their self assessment.

If the travel costs are not allowable under HMRC rules then there is no right for the expense to be claimed via the umbrella or via SA