If you qualify for travel expenses you can claim this on your P11d at the end of the tax year, this includes PAYE and Umbrella and Ltd Company Workers.
To qualify as a temporary workplace, all of the following conditions have to be met (s. 339(3)):
The 24-month rule
The fixed-term appointment rule
The depots and bases rule, or
The area-based employee’s rule.
The tax rules say that travel from home to a permanent workplace is not an allowable expense for tax purposes. By contrast, travel from home to a temporary workplace is an allowable expense
The HMRC 24 month rule
The 24 month rule is a specific condition that lets you claim travel expenses for trips between your home and your client’s offices or a “temporary workplace”. The idea behind it is that visiting a client’s workspace – as opposed to your own HQ – requires special travel and can lead to undue costs.
This travel should not be part of your standard commute; HMRC sees travel to a temporary workplace to be a business expense, unlike commuting.
The rule exists to help define what is (and isn’t) a temporary workplace. In order to set clear guidelines and limit abuse of this tax exemption, HMRC created a (relatively) simple test to figure out whether a site is temporary or not.
Put simply: if the conditions of the 24 month rule are met, you’re dealing with a permanent workplace.
So what are those conditions?
How the 24 month rule works
The 24 month rule has two key conditions. In order for the rule to apply – and for a business to NOT be able to claim this travel expense – both of these must be met:
If you meet both of these criteria, you cannot claim tax relief on your travel expenses to and from a workspace. In other words, if you spend 40% of your time in an office or onsite for more than 24 months, this is a permanent place of work.
Important extras to factor in
Here are a few key considerations to keep in mind as you apply for tax relief:
Fixed Term Appointment Rule
An employee undertaking a fixed-term appointment is not entitled to relief for home to work travel, even where it lasts less than 24 months, if the employee attends the workplace for all, or almost all of the period which they are likely to hold the appointment.
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