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What is the 24 month rule?

Posted on by Joanne Curwen

The 24 month rule often causes a lot of confusion amongst contractors.

For most people, travelling from home to work is not a deductible expense. However, in 1998 HMRC introduced legislation allowing travel expenses to a temporary workplace. So, where a contract is less than 24 months, all travel costs are allowable.

So what about contracts that don’t have a definitive length? HMRC allow travel costs until it is reasonable to assume that the contract will last more than 24 months.

Where a contract lasts for longer than 24 months, the workplace is classed as permanent. This means that travel costs are not allowable.

Things get more complicated when a person moves from workplace to workplace but then returns to a previous place of work.

If you return to a previous workplace you must apply the 40% rule to determine if it qualifies as a permanent place of work. To do this you must count back 24 months from the start of your contract. If you spent more than 40% of the last 24 months at that workplace, it can be classed as a permanent place of work. This means travel costs are not allowable.

Unfortunately, the 24 month rule does not account for you returning to a previous site but contracting for a different company. The only thing considered is whether or not your journey to work is significantly different.

Simplyco are expert contractor accountants and give the best advice around to their clients. To enquire about our services, please give us a call on 01900 898 440 or email

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