Travel between home and a permanent workplace is ordinary commuting, and it is never deductible. Travel to a temporary workplace is deductible in full — mileage, rail fares, hotels, subsistence. The entire value therefore sits in one classification, and the classification turns on a rule that catches employers out constantly: the 24-month rule, which is not about how long someone has been somewhere, but about how long they expect to be.
The rule, precisely
A workplace is temporary where the employee attends to perform a task of limited duration or for some other temporary purpose. That status is then overridden where the employee attends in the course of a period of continuous work that lasts, or is likely to last, more than 24 months — at which point the workplace is permanent and travel to it is ordinary commuting.
"Continuous work" has its own definition: a period over which the duties of the employment are performed to a significant extent at that place. HMRC applies a bright line — duties are performed to a significant extent where the employee spends 40% or more of their working time there. The test bites at 40%, so two days of a five-day week is caught, not excluded — a consultant spending one day a week at a client site is the example that falls below it. Note which way the rule runs: the 40%/24-month rule only ever converts a workplace that would otherwise be temporary into a permanent one. Attendance below 40% does not by itself make a workplace temporary; the employee must still be there for a limited duration or a temporary purpose, and an employee who attends a site for 20% of their time indefinitely, with no end in sight, is travelling to a permanent workplace.
The part everyone gets wrong: expectation, not elapsed time
Relief stops when the expectation changes, not when the twenty-fourth month arrives. An employee posted to a site for 18 months, told in month 12 that the posting will run to 30 months, loses relief from month 12 — the date the expectation changed — not from month 24. Conversely, a posting genuinely expected to last 30 months from the outset never qualified at all, even if it ends after 20.
This has two consequences employers routinely miss. The first is that a series of short extensions is dangerous: each extension has to be assessed for what is now likely, and there comes a point where the honest answer is "more than 24 months from the start". The second is evidential — since the test is about expectation, the assignment letter, the project plan and the board paper are what decide it. A firm that cannot show what it expected and when will find HMRC assuming the least favourable answer.
The exception that swallows employments
There is a separate rule that defeats the analysis entirely: where an employee attends a workplace for all or almost all of the period they are likely to hold the employment, that workplace is permanent regardless of the 24-month rule. This is the fixed-term contract trap. A worker engaged on a 15-month contract to work at one site has a permanent workplace from day one, because the site accounts for the whole employment — even though 15 months is comfortably inside 24.
It bites hardest on agency and contract staff moved from engagement to engagement. It is also the reason that, for agency workers caught by the supervision, direction or control rules, each assignment is treated as a separate employment — which makes each workplace permanent and removes home-to-site travel relief altogether. That restriction was the point of the 2016 changes, and it remains the single biggest source of incorrect travel claims in umbrella and agency payrolls.
What can be claimed when it does qualify
Where the workplace is genuinely temporary, the deduction covers the full cost of travel and of subsistence attributable to that travel:
- Mileage at the approved rates where the employee uses their own car, or actual cost of public transport;
- Accommodation and subsistence where an overnight stay is necessary — reasonable, not lavish, and supported by receipts unless a benchmark or bespoke scale rate has been agreed;
- The whole journey from home, not the excess over the normal commute. Employers frequently reimburse only the difference, which understates a legitimate claim.
Reimbursement by the employer of a qualifying expense is not taxable and does not need reporting. Where the employer does not reimburse, the employee claims the deduction themselves. Where the employer reimburses something that does not qualify, it is pay — subject to PAYE and National Insurance, with the liability sitting on the employer.
Running it properly
The controls that make this defensible are simple. Record the expected duration of each assignment at the start, in writing. Review it whenever the assignment is extended, and record the new expectation and the date. Track cumulative time at each site against the 40% threshold. Treat a change of site as a genuinely new workplace only where it is a real change — moving between two sites a mile apart on the same project does not restart the clock, and HMRC will say so. And separate the agency population from the employed population, because the rules that apply to them are not the same.
Get it wrong in the employer's favour and the exposure is PAYE, National Insurance and interest across every affected employee and every open year — the standard shape of an employer compliance review finding. Get it wrong in the employee's favour and you are simply not claiming a deduction you are entitled to, which is quieter but no cheaper.
Acumon reviews travel and subsistence policies as part of employment tax work and handles the payroll treatment through PAYE services; where contractor status is also in question, our IR35 guide covers the other half of the problem. If you have staff who have been at the same client site for more than two years, the answer is already decided — the only question is whether your payroll reflects it.