Temporary Workplace

Temporary Workplace 24 month rule?

Many contractors may have heard of the 2 year or 24 month rule with respect to travel and subsistence expense claims. In this article, we have tried to provide a simple explanation of the rules, and how they apply to contractors and freelancers. Contractors are allowed to claim travel and subsistence expenses as long as such claims relate to a location which meets HMRC's definition of a "temporary workplace" or a workplace which is not a "permanent  workplace" are not allowed to claim such travel expenses.

Temporary workplace

What is a 'temporary workplace'?

A temporary workplace is one a worker attends to perform his duties for limited duration or for a temporary purpose. In this instance a limited period is seen to be 24 months or less. For example when a contractor travels to client site for work this will be considered as temporary workplace and all travel and subsistence expenses related to this temporaryu workplace will be allowed. Or you can say Temporary work place is place where a worker attends, or expects to attend, a location for a period of less than 24 months. Remember that ordinary commuting is not allowable. Ordinary commuting is commuting to permanent workplace and in most of the contractors case permanent workplace is their home which they use as office.

Where a worker can reasonably expect to be at the same workplace for 24 months, or becomes aware that they might be, it is seen to be a permanent workplace. This applies where a worker is employed on a permanent basis or as a temporary worker on a project which has duration of more than two years. As such, a workers intention and expectation can be viewed as being as important as the actual time involved.

What is a 'permanent workplace'?

In order to get the concept of temporary workplace fully clear its important to understand the concept of permanent workplace. It is not uncommon for a worker to return to the same place of work after a period of absence. Where the worker has spent more than 40 per cent of their working time at that workplace in a 24 month period, even with a break in engagements, the workplace is considered permanent.

The 24 month rule

If you work at the same location beyond the 24 month mark, you may no longer claim travel expenses. And crucially, the moment you are aware that your contract will last beyond the 24 month mark, you must stop claiming travel expenses. This means that if you are aware from the outset of a new contract that the project is likely to last beyond 24 months, you must not claim any travel expenses between your home and place of work - from day one.

This may be from day one - if you are engaged on a project and you know from day one that your involvement will last three years then you get nothing.

If you are engaged on a project and your involvement will last 18 months then you are fine unless, say, after ten months you find that the job is so far behind schedule it is going to take 25 months. As from that date you cannot claim.

If you are engaged on a project and your involvement will last 25 months then you cannot claim. If after ten months the project is two months ahead of schedule then the finishing date is 23 months from the commencement. You can then claim as from the ten months (but not for the first ten months as the likelihood at the time was that it would exceed the 24 months).

Or, in the words of HMRC:- This rule says that a place cannot be a temporary workplace if the employee's attendance is:

  • in the course of a period of continuing work at that place lasting more than 24 months, or
  • if it is at a time when it is reasonable to assume that it will be in the course of such a period.

Business Structure

The 24 month rule applies regardless of the business structure you work under (limited company or umbrella company being the most widely used). Changing your agency, umbrella company, or even employer makes absolutely no difference to the application of these rules.

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About the author
Blog Author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.


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