Classifying the status of your workplace is essential for contractors who are claiming travel and subsistence expenses. You can only claim expenses for travel to and from a temporary place of work, which is defined by HM Revenue & Customs. There are many conditions to satisfy and contractors have to be aware of these before claiming for travel costs. If HMRC deems that your place of work is permanent, you may have to pay tax and national insurance on the amounts claimed.

An ongoing or overarching contract is usually used by umbrella company contractors and indicates that you will work on many different contracts, satisfying the temporary workplace rule. Working through an umbrella company and intending to work on one contract only, will indicate a permanent place of work and will prevent your entitlement to claim travel and subsistence expenses.

HMRC also has the 24 month rule, which deems that working on the same contract at the same place of work for this length of time indicates a permanent place of work. Keeping track on the length of service for a particular client is essential to avoid falling foul of HMRC. As soon as you realise that your contract will last 24 months or more, you should stop claiming expenses. A reputable umbrella company will let you know if this occurs.

If you change contract, your new contract has to be at least ten miles away from your previous place of work as well as the route to work being substantially different, to identify your contracts as being separate.

Working through an umbrella company will minimise the paperwork and enable you to carry out your duties whilst your umbrella company deal with necessary administration. If you claim travel and subsistence expenses, ensure you satisfy all the conditions set by HMRC.