Finance Bill amendment could result in some contractors having to repay expenses
Fortunately though, no Umbrella.co.uk contractors will have to repay any claims since April 2016.
Confusion about the wording of the Finance Bill 2016 resulted in some contractors claiming for Travel and Subsistence (T&S) expenses when they shouldn’t have. An amendment to the bill has now been applied retrospectively to April, meaning that anyone who claimed for expenses incorrectly will now have to repay the money.
Because of the way the rules were applied for Umbrella.co.uk contractors, however, nobody employed under our recruitment umbrella will have to pay any money back.
Clause 14 of the Finance Bill 2016 contained a technical error which caused some confusion about how the rules should be applied. When the error became known, HMRC issued a statement saying that the wording of the clause did not reflect the initial intention of the bill. But some people still attempted to game the system to get away with claiming expenses when they shouldn’t have. Clearly, this hasn’t worked.
An amendment to the bill (Section 339A) has closed this loophole, and HMRC has announced that the change will be applied retrospectively to April, and those will ill-gotten gains will be forced to pay them back.
Thanks to a careful reading of the rules by the senior leadership team at Umbrella.co.uk, we have ensured that none of our contractors will be in this position.
Miles Grady, Director of Umbrella.co.uk said: “Right from the outset it was clear to us that this amendment was going to be made. The government have made it clear that exploiting loopholes is not something they will tolerate. It is unfortunate if some umbrella companies have tried and gained a competitive advantage by looking at ways for their flexible workforce to pay less tax. If this was the case, then someone's going to have to make good the contractor has underpaid.
“At Umbrella.co.uk, we don’t try to play games with the taxman. We always try to be upfront and honest about situations and ensure there are no nasty surprises .”