CIS Tax · Travel · 24-Month Rule · 2026/27
The 24-month rule is real, but it sits in the tax rules for employees. If you are a Ltd company director or on PAYE, it decides your site travel. If you are a CIS sole trader, a different test applies, and it is usually more generous.
By QuoteDone Editorial Team · Last updated: 25 September 2026 · Checked against HMRC manuals
Two people can work on the same housing site, drive the same road every morning, and fall under completely different travel rules. One is a sole trader registered for CIS. The other is a director of their own limited company, and so technically an employee of that company.
The 24-month rule decides travel relief for the second person. For the first, HMRC uses a different test. Knowing which one you are is the first step.
Which Rule Applies to You?
| How you work | Travel rule | Where it comes from |
|---|---|---|
| Sole trader, paid under CIS | Base-of-operations test: 2+ sites a year normally means home-to-site travel counts | HMRC Business Income Manual, BIM37675 |
| Director of your own limited company | 24-month rule, as an employee of the company | ITEPA 2003 s339, EIM32080 |
| Employee on PAYE working on site | 24-month rule | ITEPA 2003 s339, EIM32080 |
| Through an agency, umbrella company or PSC under supervision, direction or control | Home-to-site travel relief can be lost from day one | ITEPA 2003 s339A (from April 2016) |
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If You Are a CIS Sole Trader
HMRC's business income manual, following the 1971 case Horton v Young (a bricklayer moving between sites), says:
- Where a subcontractor works at two or more different sites during a year, travel between home and those sites should normally be allowed.
- Where a subcontractor works at one site, or a very small number, that site may in fact be the business base. Travel from home to it is then not allowable.
There is no 24-month clock and no 40% calculation in that test. What matters is the pattern of your work across the year. Source: HMRC – BIM37675.
If You Are a Ltd Director or on PAYE: How the 24-Month Rule Works
For employees, travel from home to a temporary workplace qualifies for relief; travel to a permanent workplace is ordinary commuting. The 24-month rule decides when a temporary site becomes permanent.
- Is the site temporary to begin with? You attend it to do a task of limited duration, or for another temporary purpose.
- Is it "continuous work"? HMRC treats 40% or more of your working time at a place as continuous work there. Below 40%, the 24-month rule does not bite.
- Will it last more than 24 months? If you work there, or it is reasonable to expect you will work there, 40%+ of your time over more than 24 months, it is a permanent workplace.
- Watch for changes of expectation. When an extension makes a stay of more than 24 months the reasonable expectation, the site becomes permanent from that point. Earlier travel is not affected.
- Check the length of the job itself. If attendance at the site will cover all or almost all of how long you are likely to hold the job, the site is permanent regardless of the 24 months.
Sources: HMRC – EIM32080, EIM32105, EIM32125.
Worked Example: A Ltd Director and a Contract Extension
A bricklayer works through their own limited company. The company pays them mileage for using their own van at HMRC's approved rate, which is 55p a mile for the first 10,000 business miles in 2026/27.
40-mile round trip, 5 days a week, 46 working weeks, 2026/27
The job is first expected to last 18 months. At month 12, the director agrees to Phase 2, taking the total to 30 months at the same site. From that date, the site is a permanent workplace: further home-to-site mileage paid by the company would be taxable. The first 12 months are not affected.
Agencies, Umbrellas and Personal Service Companies
Since 6 April 2016, section 339A of ITEPA 2003 can remove home-to-site travel relief for people working through an employment intermediary, such as an agency, umbrella company or personal service company, where the work is under someone's supervision, direction or control. In that case, each assignment is treated as a separate employment, and travel to it is ordinary commuting from the first day.
Records That Protect Your Claim
- A dated mileage log: date, start point, site, purpose and miles
- For each site, the expected length of the job and any extensions, with dates
- For employees and directors: a weekly record of time at each site, to show the 40% position
- For sole traders: a list of the sites you worked at in the year, with invoices or job sheets
- Records kept for at least 5 years after the 31 January deadline
Frequently Asked Questions
Does the 24-month rule apply to CIS subcontractors?
Not to sole traders as such. The 24-month rule is part of the tax rules for employees in section 339 of ITEPA 2003. For self-employed subcontractors, HMRC's business income guidance looks at where the business is based and how many sites you work at instead.
Who does the 24-month rule apply to?
Employees, including directors of their own limited company, who travel to a temporary workplace. It decides whether their travel from home to that site counts as business travel or ordinary commuting.
How does the 24-month rule work?
A workplace stops being temporary if you work there, or expect to work there, for 40% or more of your working time over a period of more than 24 months. From the point that becomes the reasonable expectation, travel to it counts as ordinary commuting.
Does a break reset the 24-month clock?
Not necessarily. HMRC's guidance says a period of continuous work can stay continuous even where there is a break in attendance.
What happens if my contract is extended past 24 months?
Once it becomes reasonable to expect that you will work there for more than 24 months, the site stops being a temporary workplace from that point. Travel before that point is not affected.
What test applies to sole-trader subcontractors instead?
HMRC's guidance says that where a subcontractor works at two or more different sites during a year, travel between home and those sites should normally be allowed. If you work at one site, or very few, that site may be your business base, and travel from home to it is not allowable.
Does working through an agency or umbrella company change this?
It can. Since April 2016, workers providing services through employment intermediaries such as agencies, umbrella companies or personal service companies can lose relief for home-to-site travel where the rules on supervision, direction or control apply. Check with the intermediary before assuming travel is tax-free.
Important: This article is general information about travel expense rules, not personal tax advice. Which rule applies, and whether a journey qualifies, depends on how you work and the facts of each site. Always verify against GOV.UK and HMRC's manuals, or speak to a qualified accountant.
Author: QuoteDone Editorial Team · Last updated: 25 September 2026
Sources: HMRC – BIM37675 · HMRC – EIM32080 · HMRC – EIM32105 · HMRC – EIM32125 · GOV.UK – Mileage rates
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