The 24 Month Rule in a nutshell

[unixman]

Re the document.

Section 1.7 explains that tax relief can be obtained on the "full cost of traveling", as long as it is not "ordinary commuting".

Section 1.8 shows examples, establishing that travel to a "temporary workplace" is not "ordinary commuting", and tax can therefore be reclaimed.

Sections 3.09 and 3.11 further define what a temporary workplace is.

Section 3.12 and after says a temporary workplace can become a permanent workplace after 24 months.

So far so good.

Section 5.4 says that the cost of business travel can include accommodation and subsistence.
Section 5.5 establishes that tax can sometimes be reclaimed for the cost of accommodation and subsistence.

All of which kind-of suggests that the 24 month rule applies to accommodation. But does not actually say so and seems to be open to interpretation and discussion. The document does not seem to have been designed for our situation.

[unixman]

Thank you both for the quick response. I looked around the document. It does list these definitions. However, it still does not seem to make a clear statement that answers the question. I will continue reading, however.

I also have a contact who is taking it up with his accountants.

[TheFaQQer]

My apologies for raising this old chestnut again. I am looking for clarity on one specific part of the 24 month rule. I understand the whole thing except this:

Once the 24 month rule kicks in, it covers travel, which can no longer be reclaimed against tax. But does it also cover accommodation (I rent a room locally) and subsistence expenses ? Can I continue to claim those against tax ?

The internet says yes and no. This thread (I have searched every page) yes and no. I thought accommodation could no longer be claimed (I stopped claiming) but my accountant has just stated unequivocally that accommodation can still be claimed against tax and only travel is excluded. LisaContractorUmbrella (on this thread) says the exact opposite. Gov.uk does not back Lisa up, but it doesn't make a clear statement.

Websites generally concentrate on travel and barely mention accommodation.

HMRC define travel as the actual travel, subsistence and accommodation:

Similarly, where an employee has to stay away overnight on business, the cost of accommodation is part of
the cost of the business travel.

Linky - HMRC guide 490 Employee travel A tax and NICs guide for employers, page 32

(edit - OK, Martin beat me to it)

[ContrataxLtd]

My apologies for raising this old chestnut again. I am looking for clarity on one specific part of the 24 month rule. I understand the whole thing except this:

Once the 24 month rule kicks in, it covers travel, which can no longer be reclaimed against tax. But does it also cover accommodation (I rent a room locally) and subsistence expenses ? Can I continue to claim those against tax ?

The internet says yes and no. This thread (I have searched every page) yes and no. I thought accommodation could no longer be claimed (I stopped claiming) but my accountant has just stated unequivocally that accommodation can still be claimed against tax and only travel is excluded. LisaContractorUmbrella (on this thread) says the exact opposite. Gov.uk does not back Lisa up, but it doesn't make a clear statement.

Websites generally concentrate on travel and barely mention accommodation.

Hi Unixman

I'm with Lisa on this one, accommodation is part of the travel and therefore when travel is caught by the 24 month rule so is related subsistence and accommodation.

HMRC's manual 490 - Employee travel is the best document to refer to on this one and can be found at the following link:

https://www.gov.uk/government/upload...321897/490.pdf

It's a good 76 pages of reading but in particular you want to go to section 5.4 under subsistence which states:

The cost of business travel includes subsistence costs attributable to and
incurred during the journey in question. Similarly, where an employee has
to stay away overnight on business, the cost of accommodation is part of
the cost of the business travel. Even where an employee stays away for some
time, the cost of meals and accommodation is part of the overall cost of the
business travel.

On what basis was your accounting advising that the accommodation remains claimable?

I hope this helps, let me know if you are still unsure.

Martin
Contratax Ltd

[unixman]

That wouldn't be right surely - if accommodation is not allowable after 2 years then the associated travel wouldn't be either - subsistence is also affected by the 24 month rule for the same reason

My apologies for raising this old chestnut again. I am looking for clarity on one specific part of the 24 month rule. I understand the whole thing except this:

Once the 24 month rule kicks in, it covers travel, which can no longer be reclaimed against tax. But does it also cover accommodation (I rent a room locally) and subsistence expenses ? Can I continue to claim those against tax ?

The internet says yes and no. This thread (I have searched every page) yes and no. I thought accommodation could no longer be claimed (I stopped claiming) but my accountant has just stated unequivocally that accommodation can still be claimed against tax and only travel is excluded. LisaContractorUmbrella (on this thread) says the exact opposite. Gov.uk does not back Lisa up, but it doesn't make a clear statement.

Websites generally concentrate on travel and barely mention accommodation.

[malvolio]

Thanks for your "valuable" input and polite gestures !! .The "true" and "concise" summary is not explaining any of the above questions if the contract doesn't specify a location. Hence i did ask specific questions of how you define a "work place" if working from home, visiting clients and not going to work-place (like holidays) will constitute working at a single location?

OK, so go do some research. For example:

1. It is only a nutshell explanation, the detail on edge cases is in the rest of this thread or in the various first timer guides listed over there ---> Of even Google it, you will get plenty of advice.

2. Start with understanding what the rule is trying to achieve. Then you will see the difference between a permanent and a temporary workplace and why it is significant. Hint: home is normally your permanent workplace, as I suggested earlier (perhaps a bit too subtly...?)

3. Time is finite. Holidays don't exist. Attendance at the temporary location(s) is what matters. If you're not working, you're not there, are you?

If you are a contractor, that's your job and it's up to you to understand it as best you can. Understanding expenses is a pretty key element of it. WE don't mind answering good questions, basic ones tend to irritate - me, especially, which is why I did the original post - and perhaps ask yourself if you don't really know this area, what else don't you know that you should?

[sojan]

Yes, it is your permanent workplace, if you are running a limited. I leave you to work out why that's significant.

Yes. I leave you to work out why but the words "bleedin'" and "obvious" come to mind.

What are holidays...? Why do you think they are relevant...?

Look, I gave a concise and usable summary of the rules at the start of this whole thread so we don't have to keep answering questions about how and when it applies. Try reading it properly. Then apply it to your circumstances.

Thanks for your "valuable" input and polite gestures !! .The "true" and "concise" summary is not explaining any of the above questions if the contract doesn't specify a location. Hence i did ask specific questions of how you define a "work place" if working from home, visiting clients and not going to work-place (like holidays) will constitute working at a single location?

[ASB]

Expectations are relevant because that is how the legislation is framed.

now if you plan to refuse the next extension because it means no travel can be claimed fine. If not then you shouldnt be claiming now.

in practical terms you are right. The situation contracturally is a strong pointer. But expectation and intent are what matter in law. Judging those is difficult and a different question.

[SlipTheJab]

Actually you already have an expectation that the work will extend over the 24 month limit, so you should stop claiming now. Faffing around with artificial end dates doesn't work.

My next extension has now been sorted and I am contracted up to the day before the 24 month rule kicks in. Expectations are pie in the sky surely and it's the contract in place that matters. At the end of my next extension the client may or may not offer another one and I may or may not accept it. So can't see how I am 'faffing round with end dates'? In fact I quite fancy a change of scene and may well refuse a further extension, well that my expectation as of today :-)

[malvolio]

Will the below conditions taken into account for 24 month rule?
1. WFH be considered as another location?

Yes, it is your permanent workplace, if you are running a limited. I leave you to work out why that's significant.

2. Occasional Travel to other locations be taken into account ?

Yes. I leave you to work out why but the words "bleedin'" and "obvious" come to mind.

3. Holidays be taken into account ?

What are holidays...? Why do you think they are relevant...?

Look, I gave a concise and usable summary of the rules at the start of this whole thread so we don't have to keep answering questions about how and when it applies. Try reading it properly. Then apply it to your circumstances.