The below advice assumes you are working outside of IR35, if you are working inside of IR35 you are blocked from claiming travel and subsistence expenses.
As long as you are not working in a location for 24 months or longer you can claim all travel costs (assuming they are for business purposes).
However as soon as you know that you will be in a location for 24 months or longer then you cannot claim travel from that point.
For example if you are a contractor and you sign a contract that means you know you will be in the location for more than 24 months then you cannot claim travel from the point of signing the contract.
If you go over 24 months then there is still the scope to claim some travel costs if the place you are travelling to represents less than 40% of your overall business travel, however it is best to discuss this with as as it is not quite as straightforward as it seems.
For example, hybrid working is a popular structure now with work taking place at both a clients office and at home - you may think you can meet the 40% rule above if you work from home most of the time but if the flexible way of working is voluntary and you are not required to work from home then HMRC would deem the clients office to be the permanent workplace meaning you could then not claim any of the travel costs to it.
Also something that catches out a lot of contractors is that consecutive assignments in the same area are treated as a single workplace, even though you may be working for different clients.
Your journey to work must change significantly in order for it to be treated as a new location.
If you are unsure of your situation please do ask us.
Make sure you keep copies of all your receipts and backup. If you are claiming mileage then we would suggest you keep a mileage log, unless you log it on a system like FreeAgent.
If your business travel is allowable then you can also claim relevant subsistence costs, see here.
Examples of travel
In the below examples all work is assumed to be outside of IR35
Example 1
Jim, a limited company IT contractor, lives in Birmingham and contracts with a client for 12 months full time in Manchester. He next contracts with a client for 12 months in Nottingham, and then a third client for 9 months in Leeds.
All 3 of Jim's workplaces would be classed as temporary workplaces as they are all in geographically different locations and all less than 24 months, therefore Jim can claim travel expenses for travel to all 3 locations.
Example 2
Helen, a project manager contracting full time through her own limited company, lives in Central London and contracts with a client in Central London for 15 months. She then moves to another client, also based in Central London for 18 months.
She can claim travel expenses to the first client but as soon as she knows she will be moving to the second client she has to stop claiming travel expenses as at that point she knows she will be working in the same location for more than 24 months.
Example 3
David, a freelance business consultant working through his own limited company, works with a handful of clients at a time. He lives in South London and works 4 days a week from his home office with the other day visiting clients at various locations in London and beyond.
As 80% of David's working time is spent at home, home is his permanent workplace and any business travel will therefore be allowable.
Example 4
Jenny, a business contractor working through her own limited company, has been working with one client for 3 years with all her work taking place at the clients head office, the client has now introduced hybrid working where Jenny can choose to work from home up to 3 days a week if she wishes - however there is no requirement to work from home.
As there is no requirement to work from home, the clients head office is the permanent workplace so no travel costs can be claimed between home and the head office.
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