Claiming Contractors Travel Expenses

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Claiming Travel Expenses: What is the 24 Month Rule?

Last updated on Tuesday, May 27, 2014

Written by Churchill Knight

There was a time when contractors couldn't claim travel from work to home for a ‘temporary’ workplace. They were like any other permanent staff member - unable to claim back the cost of travel. Along came new legislation in 1998, which allowed travel to become claimable for contractors as long as the work place didn't last any longer than 24 months.

The ‘24 month rule’ is important legislation, designed for contractors or temporary workers moving from different sites as part of their employment. Travel expenses are paid tax free when travel is between home and a temporary workplace. There are many examples of when this can and cannot work:

  • If you transfer to a different client and the commute home is not significantly different, claiming won’t be available.
  • If the contract length changes from one under the 24 month rule, to over it, no travel expenses can be claimed from the date you become aware you will be at the same temporary location for over 24 months. If it’s the other way around, the claim can again start from the date you become aware.
  • If there isn't a clear end date to the contract, claiming expenses on your temporary commute can only be claimed in the first 24 months.
  • When a contract worker is transferred to a completely different workplace for 1 day a week, but still works in the same office (for more than 24 months). The contractor can claim relief on the travel 1 day a week but not on the rest of the journeys to his more permanent office.

 

For more information about expenses you can claim for as a Limited Company contractor, get in touch for a free consultation. Give us a call on 01707 871622 or request a call back.

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