The 24 Month Rule

29 May 2015

The 24 month rule is something that can cause a bit of confusion amongst contractors – it relates specifically to the claiming of travel expenses to and from a workplace. It is completely separate legislation from IR35.

It was introduced in 1998 and allows travel from home to a qualifying workplace to be claimed through the company accounts as a tax deductible expense. A qualifying workplace is one which passes a temporary workplace test. Once the 24 months are up then things can get a bit tricky as HMRC no longer class the workplace as ‘temporary’.

HMRC EIM32080 states:

“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. Where that is the case the workplace is not a temporary workplace and so it is a permanent workplace. Travel between that place and home will be ordinary commuting and so is not deductible.”

If you work at the same site for more than 24 months you may not be able to claim travel expenses as the workplace will no longer be classed as temporary. The 24th month is calculated from when you make your first journey to your end client’s offices.

If you have a contract and are working at the same site and become aware will last beyond 24 months you must stop claiming travel expenses. This means that if you are 13 months into a 20 month contract, and it gets extended for another 12 months then you are unable to claim from the 13th month – it all depends on when you become aware the contract will be longer than 24 months.

It is not uncommon for a contractor to return to the same workplace but on a different contract within a 24 month period. The 40% rule means that as long as the premises has been your workplace for less than 40% of the time between the original contract start date and the new contract start date, travel expenses can be claimed until time spent at the workplace exceeds 40% or 24 months.

If you receive a contract greater or equal to 25 months then you can’t claim any travel expenses for the entire period.

The above is a general overview of the 24 month rule as there are a few quirks and complications involve – if you have any queries then get in contact via our website at

Do you need more advice about the 24 Month Rule?

Follow this link to contact the team at Source Accounting to find out more