Last updated: 16 October 2026
The question
We have an employee seconded from our EU parent company. She was due to be with us for 18 months, of which 12 have passed. We pay for a flat on the basis that this is a temporary workplace, so it is not taxable. We are now thinking of extending her stay by another 18 months. What happens?
The 24-month rule
Employees can claim tax relief, or be reimbursed tax-free, for travel to a temporary workplace, including accommodation and subsistence while working there. A workplace is temporary if the employee goes there to do a task of limited duration or for a temporary purpose. But it becomes a permanent workplace if the employee:
- works there for a period of continuous work that lasts, or is expected to last, more than 24 months, and
- spends 40% or more of their working time there
What happens on an extension
The test looks at expectations. When the secondment was set at 18 months, the workplace was temporary and the flat was a tax-free travel expense. From the date the extension is agreed, the expected period becomes 30 months in total. From that date the workplace is no longer temporary. The flat becomes a taxable benefit, and travel there becomes ordinary commuting. The relief already given for the first 12 months is not clawed back.
| Period | Expected length | Flat taxable? |
| Months 1 to 12 | 18 months | No |
| From the date the extension is agreed | 30 months | Yes |
Example
The extension is agreed on 1 November 2026. Up to that date, the flat costing £2,000 a month is tax-free. From 1 November 2026, the cost of providing the flat is a benefit in kind, and the company pays Class 1A NIC at 15% on it. The employee pays income tax at her marginal rate, through payroll if benefits are payrolled or on her P11D.
International secondments
Other points matter for cross-border staff:
- Her UK residence status under the statutory residence test affects how her overseas income is taxed.
- If she is new to the UK after ten years abroad, she may qualify for the four-year foreign income and gains regime and Overseas Workday Relief.
- Social security rules decide whether UK or home-country National Insurance applies. A certificate may keep her in her home system for a period.
Planning options
- Keep the total assignment at 24 months or less, if the business can.
- Consider whether a new, separate role starting later counts as a change of workplace.
- Budget for the extra cost of the taxable benefit, possibly with a gross-up.
- Review the 40% test: if she spends less than 40% of her time at the site, it can stay temporary.
Frequently asked questions
Does a short break reset the 24 months?
No. Breaks do not usually stop a period of continuous work.
Can the employee still claim subsistence?
Not from the date the workplace becomes permanent.
Is the rule the same for contractors?
For contractors working through intermediaries who are subject to IR35 or supervision rules, travel to each engagement is generally treated as commuting.
What if the extension is uncertain?
Relief continues until it becomes reasonable to expect the period will go beyond 24 months.
Related: secondment to a Dubai office, PAYE for globally mobile employees and hybrid working and commuting.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with secondments and employee travel expenses. See our payroll services service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
