Travelling Expenses

Umbrella Company Expenses

5 December 2014

As previously reported, the Chancellor as part of his Autumn Statement, has stated there will be a discussion opened regarding the Government’s concern that “some temporary workers to benefit from tax relief for home to-work travel expenses that is not generally available to other workers”.

Where this statement is inaccurate is other workers do get reimbursed travel expenses while working at a temporary workplace. Any contract that a contractor takes that is less than 2 years and therefore by definition they are travelling to a temporary workplace.

A contractor does not have the same long term security that the comparable worker also working at the same workplace does and this too needs recognition. If contractors were not prepared to take short term assignments then the economy would suffer.

Where the Government’s concern is also unwarranted is that the contractors who receive the largest amount of travel expenses (and hence where the most tax is “saved”) are the ones who are prepared to travel 100’s of miles each week to fulfill a need and demand for their services. A person travelling the length and breadth of the UK is clearly incurring costs that should be reimbursed tax free. If not then by the same argument if for example they have to stay in a hotel each week (instead of travelling) should this be paid for out of the contractors own taxed pay?  If the Government are trying to compare to other workers then the other workers will have all chosen their current employer as they live locally to it. Contractors don’t have this luxury. The majority of permanent employees live near work and do not have the same requirement for long journeys and overnight stays. Meanwhile contractors often spend whole weeks for the length of the contract away from their family.

Hopefully these points will be raised by other umbrella companies as well as ourselves during the discussion process. At Umbrella we will act to protect the rights of contractors.

We will be releasing the discussion document as soon as it is available to our flexible workforce as comments from contractors should also be collated as it is they that would be affected most by the lowering of their net income.

It is clear that an even playing field between Umbrella Companies should be the outcome of this discussion.

At present some companies “offer” higher allowances for subsistence (food & drink) when travelling to a temporary assignment. Some also encourage the claiming of expenses even when no cost has been incurred.

If these practices are stamped out then the current processes offered by Umbrella and other compliant umbrella companies do provide a valuable service both to the contractor but also to the Government in ensuring tax is collected and paid in a time efficient manner.

Umbrella –Company Ltd

0800 121 6513