Mastering the 24-Month Rule: Can You Still Claim Mileage for That Site?

Stop leaving thousands of pounds on the table or risking an HMRC audit. Learn exactly how the 24-month rule impacts your travel claims as a contractor in the UK construction sector.

Back to all articles

CIS Tax · 5 min read ·

Mastering the 24-Month Rule: Can You Still Claim Mileage for That Site?

Mastering the 24-Month Rule: Can You Still Claim Mileage for That Construction Site?

In the UK construction industry, travel expenses often represent one of the biggest overheads for contractors and subcontractors ("subbies"). Whether you're a solo bricklayer, electrician, plumber, or running a renovation firm, understanding the 24-month rule can mean the difference between healthy profit margins and an unexpected HMRC tax bill.

The 24-month rule determines whether a construction site counts as a temporary workplace (where home-to-site travel is claimable) or a permanent workplace (where it becomes non-deductible ordinary commuting).

How the 24-Month Rule Works

A workplace is generally considered temporary if you attend it for a task of limited duration or for another temporary purpose. However, it stops being temporary — and travel claims must cease — if both of the following conditions are met:

  • You have spent, or it is likely (reasonably expected) that you will spend, more than 24 months working at that site as part of a continuous period.
  • You spend (or are likely to spend) more than 40% of your total working time at that location.

The trigger is based on reasonable expectation, not just actual time elapsed. As soon as it becomes clear that the total continuous period will exceed 24 months and the 40% time threshold will be met, the site is reclassified as permanent. You must stop claiming mileage immediately.

Real-World Example: The Extension Trap

You start a contract on a large residential development in Manchester, initially expected to last 18 months. At this stage, the site is temporary, so you can claim approved mileage rates (currently 45p per mile for the first 10,000 business miles in the tax year).

Twelve months in, the developer asks you to take on Phase 2, extending your total time on the same site to 30 months. The moment you agree to the extension, the site becomes a permanent workplace in HMRC’s eyes. You must stop claiming home-to-site mileage right away — even though you’ve only been there for a year so far.

Many contractors make the costly mistake of continuing claims until they actually reach the 24-month mark. This is high-risk and frequently triggers audits.

The Importance of the 40% Rule

The 40% threshold provides important flexibility for specialist trades. If you work on a large site for several years but only attend two days a week (40% or less of your total working time), the site can remain temporary. This allows ongoing mileage claims.

However, you must maintain robust evidence. HMRC expects clear records — site diaries, timesheets, invoices, or GPS logs — to prove your time allocation across multiple locations.

Financial Impact: Why This Matters

Mileage claims add up quickly. Driving 40 miles round-trip to a site, five days a week, equals 200 miles weekly. At 45p per mile, that’s £90 per week tax-free (or deductible). Over a full year, this exceeds £4,500.

Claim incorrectly on a permanent site and you risk:

  • Disallowed expenses
  • Tax and National Insurance adjustments
  • Penalties and interest

Under-claiming when eligible simply means giving away thousands of pounds of your hard-earned income.

Common Pitfalls for Construction Contractors

  • The Reset Myth — Leaving a site for a short break (e.g., one week) and returning does not reset the 24-month clock. HMRC looks at the overall continuous period of work.
  • Multiple Sites for the Same Client — If you move between nearby sites for the same client and the journeys are not materially different, HMRC may treat them as a single workplace.
  • Poor Record-Keeping — Relying on memory for projects from years ago is dangerous. Use dedicated mileage tracking apps with GPS, timestamps, and site addresses.

How to Stay Compliant and Maximise Profits

  1. Review contracts regularly — Every time a project is extended or the scope changes, reassess the 24-month and 40% position.
  2. Track time accurately — If you work across multiple sites, calculate your weekly percentage of time spent at each.
  3. Adjust your pricing — If a site will clearly be permanent from the start (or becomes permanent mid-project), build the non-deductible travel costs into your quote or day rate.
  4. Maintain strong records — Keep digital logs, invoices clearly stating site addresses and dates, and any correspondence about extensions. This is your best defence in an HMRC enquiry.

Action Steps You Should Take Today

  • Audit all your current sites: Check actual time spent and future expectations.
  • Calculate the 40% threshold for any site where you work regularly.
  • Update quotes and contracts where necessary to reflect non-claimable travel.
  • Implement a reliable mileage logging system (apps with automatic GPS tracking work well).

Final Thought

The 24-month rule exists to distinguish genuine business travel from ordinary commuting. In the competitive world of UK construction, professionalism means getting both your workmanship and your paperwork right.

If you’re unsure about a specific contract, multiple sites, or need help reviewing your current claims, consult a qualified accountant who specialises in the construction sector. Don’t leave money on the table — or risk an expensive HMRC adjustment.