24 Month Rule
You are permitted to claim expenses, providing your workplace meets HMRC’s definition of a temporary site; whereby your attendance lasts no longer than 24 months. At the point you know that your contract will last beyond 24 months, you must stop claiming expenses. If for example, you agree a 36 month contract from the outset, no expenses at all can be claimed against the contract.
After 24 months, if you spend 40% or more of your time at the same site, travel between home and that place or accommodation expenses are no longer permitted.
If you continue working for the same client but change site after 24 months, the new workplace must be geographically different to the previous workplace or there must be a significant change to your daily commute to be entitled to claim travel and accommodation expenses. For example, if the new workplace is a different building within the same road, then no expenses are permitted to this site. If daily mileage to one workplace is 15 miles and the new workplace is 12 miles albeit in the opposite direction, there is no significant change the daily commute and therefore no expenses are permitted to be claimed.
If you have previously claimed expenses to the same site under a different arrangement, this must also be taken into account against the 24 month rule. Simply moving Umbrella Company won’t allow you to continue claiming expenses, as the rule applies to the site you are working at rather than the company you use.
If you would clarification on what expenses you are entitled to claim, please do not hesitate to contact a member of our team on 01206 713680.
Alternatively download our free expenses guide to keep as a reference.
HMRC are targeting Umbrella Companies who are misleading contractors into claiming false expenses. Visit our Dubious Claims page to read more.
