2yr rule and contract gap ?

[swebb]

I've was at a client for approx 18 months then the contract finished so I decided to take some time off before looking for work, initially 2 months but this stretched out to 3 months before trying to find alternative work. I got a few interviews but then the original client contacted me again and offered another contract as they had some new work to complete on the project I was working on before.

Where do I stand regarding the 2yr rule and travel expenses. Will the tax man view the new contract as an extension of the original contract at the same client location or does the fact the original contract finished and there was a 3 month gap where I looked for other work mean the 2yr rule is reset ?

[SueEllen]

Thought of using the search function?

It's been discussed before.

Some of the views are as follows:
1. Two month gap is definitely not long enough to restart the 2 year rule - after all a permie could take a 2 month sabbatical or holiday.
2. The gap should be the length of time of the contract (ignoring the 40% ruling)

[swebb]

Ok I did a search before for the 2yr rule but I have now tried for the 24 month rule and found a few useful threads such as this one

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

So basically if you are somewhere for 2yrs approx then you can't revisit and claim expenses for 14 or so months. You also shouldn't claim expenses at the point you know you will go over the 2yrs.

Now what I'm not sure about is that in the 18 months I was at the client in the last 6 months or so I was working 2 days a week at home (not claiming obviously). So is the 2yrs effected by this, I guess not because still 40% of my time would be at the customer site.

Also what I'm puzzled about is say you got a contract at one customer in say Scotland for 6 months, then another in London for 6 months and bounced between the every 6 months how is this dealt with .... brain fade.

[eek]

Hold on though on that basis if you had worked somewhere for 2yrs that would mean you would need to stay away from there for 2yrs and I know that isn't correct because you only have to go elsewhere for a year.

It is correct. If over 2 years you've spent more than 40% of your time at that site expenses cannot be claimed.

[LisaContractorUmbrella]

Ok I did a search before for the 2yr rule but I have now tried for the 24 month rule and found a few useful threads such as this one

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

So basically if you are somewhere for 2yrs approx then you can't revisit and claim expenses for 14 or so months. You also shouldn't claim expenses at the point you know you will go over the 2yrs.

Now what I'm not sure about is that in the 18 months I was at the client in the last 6 months or so I was working 2 days a week at home (not claiming obviously). So is the 2yrs effected by this, I guess not because still 40% of my time would be at the customer site.

Also what I'm puzzled about is say you got a contract at one customer in say Scotland for 6 months, then another in London for 6 months and bounced between the every 6 months how is this dealt with .... brain fade.

The 40% rule is a bit of a tricky one - there are some examples here EIM32080 - Travel expenses: travel for necessary attendance: definitions: temporary workplace: limited duration, the 24 month rule