On the face of it, for your scenario, you would think that there is no issue as there are two separate contracts in two separate locations, neither spanning longer than 24 months. Once it is breached you have to stop claiming your travel, however keep your eye on the rolling 24 months position each month as you may go under the 40% again, at which point you can start claiming your travel again. You need to look at the previous 24 months on a rolling 24 month basis all the time to see if the 40% rule has been breached at any point. Where the 24 month rule is breached there is still a chance to claim some of your travel costs if the location represents less than 40% of your overall business working time.īelow 40% and it will still be considered a temporary workplace. It is the point at which you know you will be there 24 months or longer at which the location changes from being temporary to permanent. However, if you sign a contract that means you are certain you will be in the same location for more than 24 months then you cannot claim travel costs. The 24 month ruleĪs long as you are not working in a location for 24 months or longer the location will be considered to be temporary, therefore travel can be claimed. In determining whether a workplace is temporary or not there are two main tests – the 24 month rule and the 40% rule.
Travel to a permanent workplace cannot be claimed as this is seen by HMRC to be regular commuting, whereas travel to a temporary workplace can be claimed. The main factors are the difference between a temporary workplace and a permanent workplace and also the location of the workplace in question. The below answer assumes you are not caught by IR35 – new rules came in for the 16/17 tax year which block travel costs if you are caught by IR35.ĭetermining the travel expenses that can be claimed by your limited company can, in some cases, be difficult. Will I still be able to claim my travel expenses on this new contract? My contract is due to finish soon after which I will be taking on a 12 month contract with another client, also based in the city of London, but at Blackfriars. Question, Contractor Travel Expenses: I am a limited company contractor and I have been working on an 18 month contract which is based at Cannon Street in the city of London (this was my first contract).
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