IR35 Ask an Expert - 24 Month Rule & Length of Contract

IR35 specialist Seb Maley answers your questions regarding the contracting profession and the potential pitfalls of the IR35 legislation.

 

Question: “How will the 24 month rule affect me in terms of IR35? Also, my contract has been extended which will mean I’ve been with the same client for more than 2 years, how will this affect my IR35 status?”

 

Answer: “There is no connection between the 24 month rule regarding travelling expenses to and from a site and the IR35 legislation. There is a common misconception amongst contractors that working for a client for two years will mean they are automatically caught by IR35. This is incorrect; there is no specific time limit on how long you can provide services for one client.

 

Of course, the longer you are at one place, the more likely it is that HMRC will argue that you are ‘part and parcel’ of the organisation. However, if your contract and working practices remain IR35 compliant, the length of time you are there is largely irrelevant. Indeed, we have successfully defended contractors who have been at the same place for upwards of five years.

 

The only other point to make is that the longer a contract is, the higher the potential liability will be if you are ‘caught’ by IR35.”

By:Troy Stevens

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