When an employee or director travels to a temporary place of employment, from their permanent place of employment (usually the home address for Personal Service Companies), then they can claim tax relief on relating travel & subsistence expenses.  However, if/when a temporary place becomes (for tax purposes) a permanent place of employment, then travel & subsistence expenses are no longer tax deductible.

The rule that decides on when this change happens is called ‘the 24 month rule’.  It states that when the director/employee is, or even expects to be, at that site for 24 months or more AND spends 40% or more of their work time at that site, this site is then treated as their ‘permanent place of employment’.

This law is extremely relevant to freelance contractors.

We are often asked; what if I go to a different client on the same site?  Or what if I take a break for a few months and go back?  Or what if I go to a different, but nearby site?  Can I reset the 24 month clock?   And the answer is often NO.  There are only two things that restart the 24 month rule clock. One is to change employer (which might mean leaving employment and starting one’s own company).  The other is to go to a significantly different site – which has a significant effect in distance or time taken to get there.  HMRC has some examples in its booklet 490 which is online and worth looking at. https://www.gov.uk/government/collections/tax-and-national-insurance-contributions-for-employee-travel-490