The 24 month rule: A Guide

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The 24 month rule is a regulation introduced by HMRC that attempts to clarify a worker’s right to claim travel and subsistence expenses.

The key factor for determining tax relief status within the 24 month rule lies in two different classifications of workplace. For those jumping into contracting from permanent roles, these classifications should sound familiar: temporary and permanent.

We've offered a breakdown of both of these statuses.

Temporary workplaces and the 24 month rule

If your workplace is considered temporary, then you are able to claim your travel and subsistence (T&S) expenses during your time at this place. Here are some examples:

  • If your contract is less than or expected to be less than 24 months: This will be seen as a temporary workplace.
  • If the length of the contract is uncertain: This will be seen as a temporary workplace until the 24 months is reached.
  • Alternatively, if the contract is over 24 months so you have not been claiming travel/subsistence and then it is shortened or changed so the length is within the 24 months, you can start to claim these expenses at the point this change occurs.

Sometimes, you might have more than one workplace in the course of doing your assignment. It is possible that the new location could be classified as temporary workplace, thus allowing for tax relief. We’ll address such a scenario below.

Permanent workplaces and the 24 month rule

If your workplace is considered permanent, then you will be unable to claim for your travel and subsistence expenses during your time at this place. Some of the central factors for determining if a workplace is a permanent include:

  • An assignment length at that workplace that lasts 24 months or longer AND
  • The assignment requires that you spend more than 40% of your time at that workplace

Two different workplaces and the 24 month rule

It’s possible that you could end up working at two different permanent workplaces during the same assignment. As HMRC notes in Employee Travel: A tax and NICs guide for employers.

For the 24-month rule to apply, both legs of the test must be met; for a workplace to be deemed permanent, the employee must have spent or be likely to spend more than 40% of their working time at a workplace and they must attend it or be likely to attend it over a period lasting more than 24 months.

Scenario 1: Permanent and Temporary Workplace

Say your contract was for over 24 months at Location A. During the assignment, you’re then required to spend one day per week at Location B for over 24 months.

While Location A remains permanent, Location B is temporary because less than 40% of your working time would be spent there. The fact that it will last longer than 24 months can be thrown out – the 24 month rule won’t apply.

Scenario 2: Assignment changes and exceeds past 24 months

Here’s another example of a permanent workplace according to the 24 month rule.

Your contract was originally less than 24 months, but was then extended, or the circumstances changed to the extent that it would take your assignment over the 24 month barrier. This workplace ceases to be a temporary workplace from the date that the expectation changed.

Resetting the 24 month rule

You can reset the 24 month clock if there is a "significant" change in the commute or location. HMRC doesn’t formally define what constitutes a significant change, so it will need to be determined on a case by case basis.

A resetting of the 24 month rule only applies to a limited company service that intends to be at a workplace for more than 24 months. If that’s the case with your assignment, you can then revert to the 40% rule, which means you’ll need to calculate how long you would need to be away from that location to be able to claim in the future.

Scenario 3: 100% working time over 24 months


You’ve been at a workplace for 24 months and spent 100% of your working time there. You can reset the 24 month rule if you didn’t then commute to that location for the next 14.4 months, or nearly a year and a quarter. This would mean that you’d spent 9.6 months of the last 24 months commuting to that location. Therefore, you would be able to claim T&S from that point forward until the 40% rule was breached.1 (see the pictured example to see the equation)

Benefits of a contractor accountant

As you’ve read, understanding the 24 month rule and when to claim for travel and subsistence can be complicated. That’s where a contractor accountant such as ClearSky can help. Our expert personal accountants can regularly check whether you’re caught by the rule ensuring your T&S expense claims remain compliant.

Above all, remember to tell your personal accountant whenever your circumstances change.

IR35 changes target certain T&S expenses

Another development around travel and subsistence to be aware of relates to IR35 legislation that took effect from 6th April 2016. HMRC has stated that if you are under (or inside) IR35, certain business expenses may not be payable. This can change from assignment to assignment. These expenses include:

  • Travel
  • Business mileage
  • Food and drink (subsistence)
  • Accommodation

If your assignment is deemed inside IR35, you’ll be unable to claim T&S to your normal workplace. You can still claim for T&S if required to take ad hoc trips to other locations.

ClearSky can make sure you stay fully compliant with this. We offer all of our clients a free assignment review service, complete with guidance on whether a project is likely to fall inside or outside IR35.

Turn to ClearSky – start your personal service company today

At ClearSky, we’re committed to offering contractors expert, best practice advice to manage your finances in the most tax-efficient way possible.

ClearSky are a founding member of the Freelancer and Contractor Services Association (FCSA), so compliance is a significant part of everything we do. We’ve helped many talented professionals set up and manage their limited companies over the years.

We are with you all the way in your contracting career, whenever you need us. Because we understand everybody’s unique, we’ll advise you in a manner that serves your personal circumstances best.

For more information, or to sign up, please call 0800 032 5326 or email

1: REMEMBER: the Permanent/Temporary workplace is on location and not to do with the client