24 month Rule

14th August 2015

Contractors: Beware possible end to 24 month travel & subsistence tax rules.
The more observant readers of the recent Summer Budget will have noticed that tucked away from the main headlines was the announcement that HMRC have started a 3 month consultation exercise into:

The aim of this proposed tax rule change would appear to be to restrict the number of contractors that are currently eligible to claim a corporation tax deduction for ordinary commuting and subsistence costs where they currently fall within the generous ’24 month’ rule. The trigger for this new restriction being if the worker is subject to the ‘supervision, direction or control’ of any person.

Obviously nothing is cast in stone yet, but initial thoughts include:

  • Does being caught by this rule weaken your IR35 position ?
  • Will lawyers be able to produce contracts that keep the relationship outside of this test ?
  • Surely all business relationships are subject to supervision, direction or control by another person, so is this effectively the end to the 24 month rule ?
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