24 mth rule - same distance travelled

[Hobosapien]

It depends on the paper trail, doesn't it? ...

The only paper trail that is relevant is the contract agreed and signed.

Even if part of a large project or programme there is no obligation to remain on contract for that length unless you have agreed to it in contract. There are many reasons why a contractor would not remain to the end of a multi year project even if at the start they considered it a possibility.

For expenses HMRC will only look at the agreed contract if they investigate, they won't be asking the client for related project documents and gantt charts unless it's part of a much wider investigation of some sort that defies normal logic.

If the client wanted the contractor for the length of the project they would make that clear at the start and offer a contract for the anticipated length of the project. No downside to the client as they're only committed to the notice period and even then aren't committed to paying out for notice period not worked, unless they've agreed to it in the contract terms.

[WordIsBond]

The only paper trail that is relevant is the contract agreed and signed.

That's not true for IR35, what makes you so sure it's true for this? Has HMRC said so?

For expenses HMRC will only look at the agreed contract if they investigate, they won't be asking the client for related project documents and gantt charts unless it's part of a much wider investigation of some sort that defies normal logic.

An investigation that defies normal logic, like, say, an IR35 inspection?

If the client wanted the contractor for the length of the project they would make that clear at the start and offer a contract for the anticipated length of the project.

Yes, they might. And if the contractor declines it because of the 24 month rule, and says give me 3 or 6 month contracts instead (wink, wink, nod), and stays for 3 years, there's a paper trail of that offer being made, and no guarantee HMRC won't uncover it.

And all an inspector has to do is ask the client if the contractor knew at the beginning that he was going to be there 3 years, and the client to say the wrong thing, and there's a problem.

But surely the inspector would never ask and the client would never say the wrong thing, so carry on.

[WordIsBond]

Don't get me wrong, if your contract doesn't breach the 24 months, you've got a pretty good argument on your side, especially if the client has never put anything in writing talking about time past that. And I'd say it is probably ironclad if you don't go past 24 months, you can always say that whatever the client wanted I never intended to stay that long.

But if you do stay longer, and you knew from the beginning the project was a long one, there's no guarantee HMRC won't go after it, and the benefit of the doubt only goes one way with HMRC.

[Hobosapien]

The rule is clear in that you must stop claiming travel related expenses from the point you know the contract will go over 24 months. You can only know that for a fact when you have the contract or extension agreed and signed that takes you over 24 months.

Everything else, including the IR35 bogeyman or accuracy of a project plan, is irrelevant. Work to the rules as you know them applying at that moment in time not what may (however unlikely) happen in the future.

I'm sure I'm not the only one that has claimed up to month 23 then renewed beyond month 24 with no further claiming and had no come back from accountant or HMRC. The rules are the rules.

[northernladuk]

The rule is clear in that you must stop claiming travel related expenses from the point you know the contract will go over 24 months. You can only know that for a fact when you have the contract or extension agreed and signed that takes you over 24 months.

Everything else, including the IR35 bogeyman or accuracy of a project plan, is irrelevant. Work to the rules as you know them applying at that moment in time not what may (however unlikely) happen in the future.

That's not the wording they use in the guidance....

And it particularly mentions...

The legislation is written in terms of the length of time that it is reasonable to assume, or is likely, that the employee will spend at that workplace. The effect of the rule is not altered where the expectation does not match the outcome

OP uses exactly that wording when he said the following.. In fact he said it twice.

it's likely going to be a 3 yr programme, so likely extended.

[oliverson]

I suspect this has been asked before but say you live in Manchester and contract predominantly in London - Canary Wharf for 2 years then City for 2 years then Back to Canary Wharf for whatever. Doesn't affect me as I'm 60%+ from home but a mate of mine has been doing this for years on end now and hasn't stopped claiming significant travel and accommodation costs. To me it's valid. London is a big place but I'm suspecting the revenue probably won't see it that way.

[northernladuk]

I suspect this has been asked before but say you live in Manchester and contract predominantly in London - Canary Wharf for 2 years then City for 2 years then Back to Canary Wharf for whatever. Doesn't affect me as I'm 60%+ from home but a mate of mine has been doing this for years on end now and hasn't stopped claiming significant travel and accommodation costs. To me it's valid. London is a big place but I'm suspecting the revenue probably won't see it that way.

https://forums.contractoruk.com/acco...le-london.html

Where does he stay?

To get an answer as to valid or not you are going to have to look at his situation in great detail, check guidance, assess your appetite to risk and then finally make a judgement call. It won't be one we all agree with I can guarantee that.

[oliverson]

https://forums.contractoruk.com/acco...le-london.html

Where does he stay?

To get an answer as to valid or not you are going to have to look at his situation in great detail, check guidance, assess your appetite to risk and then finally make a judgement call. It won't be one we all agree with I can guarantee that.

That's a good read, thanks for the link.

Situation is Manchester -> Euston (I think) and tube to whatever site he's at then staying over at rented accommodation in the same place it's been for years. Finally at end of week, Euston -> Manchester. Probably sits in the same seat on the train each time.

[northernladuk]

That's a good read, thanks for the link.

Situation is Manchester -> Euston (I think) and tube to whatever site he's at then staying over at rented accommodation in the same place it's been for years. Finally at end of week, Euston -> Manchester. Probably sits in the same seat on the train each time.

So he can't claim the travel to his rented accomodation or food. From there to client could be possible? Probably peanuts so I wouldn't be claiming any of that.

That said there is no telling some people. I remember sitting on a train from London with two guys opposite me who started chatting and both turned out to be contractors. One of them drops it in he's been working in London nearly 4 years so in I go. Quiz him about his 24 month status. He looks me in the eye and tells me he's via a different agent with a different client 6 floors up so the clock reset. I nearly spat my coffee out. Showed him the thread on here and even the HMRC example about the client next door and he wasn't having any of it. The other guy went quiet and spent the rest of the journey reading on his phone so I've a feeling he's learnt some bad news as well but at least he looked bothered.

[oliverson]

So he can't claim the travel to his rented accomodation or food. From there to client could be possible? Probably peanuts so I wouldn't be claiming any of that.

That said there is no telling some people. I remember sitting on a train from London with two guys opposite me who started chatting and both turned out to be contractors. One of them drops it in he's been working in London nearly 4 years so in I go. Quiz him about his 24 month status. He looks me in the eye and tells me he's via a different agent with a different client 6 floors up so the clock reset. I nearly spat my coffee out. Showed him the thread on here and even the HMRC example about the client next door and he wasn't having any of it. The other guy went quiet and spent the rest of the journey reading on his phone so I've a feeling he's learnt some bad news as well but at least he looked bothered.

well, that's worrying for him. Glad I'm only on site 2 days a week and when that ends I think I can squeeze in another couple of years down there before either a) I hang up my keyboard or b) IR35 reforms do that for me.