Ainsworth Accountants: Accounts, Tax and Business Advisors.

Introduction to the '24 Month Rule'

We operate a full Accounts and Tax service for Contractors.

Summary of the 24 Month Rule:

• Applies to Travel and Subsistence Expense Claims
• Applies to all UK Employees - not just Directors or Contractors
• Not connected to IR35
• Does not apply to Sole Traders - these have separate regulations

Employees can claim travel expenses for travel between a qualifying temporary workplace for 24 months.

Employees must stop claiming travel expenses after 24 months, or immediately it is known that this travel will continue beyond 24 months.

Travel expenses include accommodation and subsistence which relate to the travel.

Key Regulation Points about the 24 Month Rule

• A UK tax rule under Section 339(5) and (6) of ITEPA 2003
• Applies to all UK employees - not just contractors
• Applies to Contractors - who are employees of their own Limited Company
• Is not a regulation connected to IR35
• Nearby temporary workplaces are considered to be the same workplace.

The 40% Rule

If, after 24 months, the employee returns to a temporary workplace which he/she attended more than 40% of the time in the previous 24 months, then the travel and related expenses cannot be claimed.

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