The 24-month rule for employee travel deductions is frequently misunderstood as a simple rule allowing travel expenses whenever an assignment lasts less than two years. The legislation is more restrictive. A workplace must first qualify as temporary because the employee attends it to perform a task of limited duration or for another temporary purpose. The 24-month test can then turn that workplace into a permanent workplace where continuous attendance lasts, or is expected to last, beyond the statutory period.
This distinction is particularly important for engineers seconded to manufacturing projects, healthcare staff moving between sites, consultants working on long implementations and employees assigned to major construction or technology programmes. The contractual label attached to the assignment does not determine whether home-to-work travel qualifies for relief.
How the 24-month rule for employee travel deductions operates
A workplace can initially qualify as temporary even where the employee attends regularly. The first question is whether attendance is genuinely for a task of limited duration or another temporary purpose. The second is whether the employee performs duties there to a significant extent over a period that exceeds, or is expected to exceed, 24 months.
For this purpose, continuous work broadly means that the employee spends 40% or more of their working time at that workplace. The detailed temporary workplace and 24-month rule therefore does not automatically prevent relief merely because an employee visits the same location for more than two years. The 40% test and the nature of the attendance remain important.
Conversely, an employee who expects from the outset to spend substantially all their working time at one location for 28 months does not receive relief for the first 24 months. The workplace is treated as permanent from the beginning because the expectation already exceeds the statutory limit.
The expected duration matters before the actual duration
The rule is applied using the facts and expectations that exist at the relevant time. This can produce a different result from simply looking backwards after an assignment ends.
Suppose an employee is sent to another site for 18 months. Travel may initially qualify because the assignment is expected to remain within 24 months. After ten months, the project is extended and the employee is now expected to remain there for 28 months in total. From the point at which that expectation changes, the site becomes a permanent workplace. The earlier travel does not retrospectively become ordinary commuting.
The opposite can also occur. If an employee is assigned to a site for 28 months but the project unexpectedly ends after 18 months, travel relief does not become available retrospectively. The original expectation was that the employee would work there for more than 24 months.
24-month rule for employee travel deductions when assignments change
Employers should therefore document changes in assignment length when they occur. Project extensions, secondment letters, client contracts and revised staffing plans can all establish the point at which the expectation changed.
Moving an employee briefly away from a site does not necessarily restart the 24-month period. Breaks in attendance can form part of the same period of continuous work, particularly where the employee is expected to return. Altering the desk, floor or building within substantially the same workplace will also not necessarily create a new temporary workplace.
The practical question is whether the employee’s workplace has genuinely changed in a way that materially changes the journey or whether the commercial reality is continued attendance at the same location.
Fixed-term employment creates another restriction
A workplace can fail to qualify as temporary even where the employment itself lasts less than 24 months. If the employee is engaged on a fixed-term appointment and expects to work at one workplace for all or almost all of that employment, that location may be permanent from the outset.
The fixed-term appointment rules therefore prevent a 12-month employee from automatically treating the normal journey to their only workplace as business travel simply because the employment is short. HMRC’s practical approach is generally not to challenge relief under this specific restriction where attendance is expected to cover less than 80% of the likely duration of the employment, although the other temporary-workplace conditions must still be satisfied.
Reimbursements do not determine deductibility
An employer paying mileage, rail fares or hotel costs does not itself establish that the expense is tax-free. The underlying journey must qualify. Likewise, an employer’s refusal to reimburse an expense does not prevent the employee from claiming tax relief where the statutory conditions are met.
Businesses operating mobile workforces should incorporate the workplace analysis into their payroll and PAYE procedures rather than relying solely on expense-policy wording. Where assignments are extended, employees move between connected sites or the 40% threshold is difficult to establish, specialist tax advice should consider the working pattern before expenses are treated as tax-free.
Disclaimer: This article is provided for general guidance only and does not constitute personal tax, legal or financial advice. The correct tax treatment depends on the specific facts, applicable legislation and HMRC practice at the relevant time. You should contact us for advice tailored to your circumstances before taking or refraining from any action.
