Small Business Accounting

What is the 24 Month Rule for Directors Expenses?

By

Chris Andreou

What is the 24 Month Rule for Directors Expenses? guide

Contents

The 24-month rule, also referred to as the two-year rule, enables contractors to claim travel expenses from their home to a client's office, as long as it is classed as a "temporary workplace".

The following conditions must apply for a work location to be classed as a "temporary workplace"

  • The period of engagement is less than 24 months
  • The contractor should spend less than 40 percent of their time at the workplace

Essentially, if you work at the client's office for more than 24 months, or spend more than 40 percent of your time at the location, it is considered a permanent workplace-and as such, you won't be able to claim travel or subsistence expenses.

Bear in mind that this is subject to the SDC legislation introduced in April 2016. Further elaboration on SDC can be found in our guide to claiming expenses as an umbrella company contractor.

<p>The 24-month rule, also referred to as the two-year rule, enables contractors to claim travel expenses from their home to a client's office, as long as it is classed as a "temporary workplace". <br></p><p>The following conditions must apply for a work location to be classed as a "temporary workplace"</p><ul><li>The period of engagement is less than 24 months</li><li>The contractor should spend less than 40 percent of their time at the workplace<br></li></ul><p>Essentially, if you work at the client's office for more than 24 months, or spend more than 40 percent of your time at the location, it is considered a permanent workplace-and as such, you won't be able to claim travel or subsistence expenses. <br></p><p>Bear in mind that this is subject to the SDC legislation introduced in April 2016. Further elaboration on SDC can be found in our guide to <a href="https://goforma.com/contractors/claiming-umbrella-company-expenses" target="_blank">claiming expenses as an umbrella company contractor</a>.</p>

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