What is the 24-month rule?
The 24-month rule is a regulation introduced by HMRC allowing contractors to claim travel and subsistence expenses when travelling from home to a client’s site. Certain criteria must be met in order to claim business expenses.
The rule requires you to work at a temporary workplace. A workplace will be considered temporary if you have worked there for less than 24 months. After this time, you are unable to claim for further expenses.
If your workplace is considered permanent you are unable to claim for any expenses. A workplace is considered permanent if you have worked longer than 24 months and have spent more than 40% of your time there.
When Can You Claim?
- When the contract is less than 24 months.
- Provided the contract is expected to be less than 24 months or the length is uncertain, the workplace will be considered temporary. You can claim until the 24 month threshold is reached.
- If the contract is expected to be longer than 24 months and is shortened, you can claim from the date of change.
- When the contract is less than 24 months and changes to last longer, you are unable to claim from the date of change.
What Is The 40% Rule?
If you spend more than 40% of your time at a temporary workplace, then it is considered permanent. This means you are unable to claim for any expenses. This applies if you have gaps in employment and return to the same place of work within 24 months. However, if you exceed 40% of your time within 24 months, you can claim until this is reached.
If you have any further questions regarding the 24-month rule, please don’t hesitate to contact us.