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Employees are entitled to tax relief for any costs incurred in travelling to or from a place they have to attend in the performance of their duties, provided the journey is not private travel or ordinary commuting to a permanent workplace.

HMRC use the ’24-month rule’ to determine whether a workplace is deemed to be temporary, and therefore, whether costs associated with travel can be claimed. This prevents a workplace from being deemed temporary where an employee attends it in the course of a period of continuous work which lasts, or is likely to last more than 24 months.

Therefore, if a person expects to work at a particular location for a period of 24 months or less then they can claim for travel and associated costs. Critical to this is the fact that it is based on the expectation of the individual, not the actual time at the location; likewise, it is based on the time at a location, not the client you are contracted to. A likely time for an expectation to form would be around the signing of a contract extension.

If a workplace is deemed a permanent, costs can still be claimed for travel to other locations provided the time spent at the site represents no more than 40% of the working time. If the individual only works at a single location for the entire duration of their company’s existence, then that location becomes the de facto permanent workplace.

Mileage can be claimed at the following rates, by method of travel:

Car

Motorcycle

Bicycle

First 10,000 miles

45p

24p

20p

Mileage in excess of 10,000

25p

24p

20p

Gorilla Accounting is a specialist accountancy firm, exclusively for Contractors and Freelancers operating through a Limited Company or Umbrella Solution.If you would like more information,get in touchwith our New Business Team by calling 0330 024 0406 or email info@gorillaaccounting.com.

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