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24 month rule and home working

How does the 24 month rule interact with home working? Now working less that 40% of time at location

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I have a contractor who works for a client. They have now been working for a client for over 24 months. Before the pandemic they would travel to the client and be able to claim the mileage under the 24 month/40% rule.

The test per HMRC is

The test is whether the employee has spent, or is likely to spend, 40% or more of his or her working time at that particular workplace over a period that lasts, or is likely to last, more than 24 months.

Given the pandemic and home working my client now rarely travels to the location and is spending substantially less than 40% of his time there.

Am I to conclude that the trips in to the client's location remains a tax deductible expense, given that although the contract has extended beyond 24 months, 40% of their time is not spent at that location?

I would be interested in your views. 

 

Replies (4)

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By paul.benny
08th Apr 2021 12:21

Is the contractor working through a PSC, and if so, what is the IR35 status? If the contractor is now a deemed employee, this will surely affect ability to claim deductions for mileage.

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By Kylo Ren
08th Apr 2021 12:49

He's outside IR35

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By Tax Dragon
08th Apr 2021 14:55

I don't see what IR35 has to do with it. Surely the employment tested is the actual employment?

But... talk about quoting out of context. You haven't provided enough info for us to answer, OP, so go back to what you were looking at (EIM32080?), read the whole page, read the pages before that introduce it, read the legislation it comments on and conclude accordingly.

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By BHConsulting
13th Apr 2021 17:56

I had the following info confirmed by HMRC staff on a webinar of theirs about this exact subject.

In order to work out if a work location counts as a permanent workplace or not, you need to apply the following rules in this order.
• If you spend 40% or more of your time at that location, it will be a permanent location, unless the contract is for 24 months or less.
• If you spend less than 40% of your time at that location, it will be temporary unless you attend for a continuous work task rather than visiting to perform a task of limited duration.

I found it quite simple to apply these rules once I understood the order to apply the two tests. Hope that helps.

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