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HMRC has released new guidance on the travel and subsistence (T&S) restrictions that came into force this month and who they will apply to.
Specifically, the new guidance tackles questions relating to the personal provision of services and supervision, direction and control.
We have summarised many of the points and picked out some of the more interesting paragraphs that could be of consequence to contractors.
The government has published its Finance Bill, confirming a number of important amendments from the Budget and Autumn Statement.
It contains a number of important details about travel and subsistence (T&S) tax relief for contractors engaged through an employment intermediary, like an umbrella company.
Travel and subsistence
Clause 14 of the bill refers to ‘travel expenses of workers providing services through intermediaries’, detailing important changes to T&S tax relief for contractors engaged through umbrella companies.
The document includes a number of amendments, but none that were unexpected.
In the past, contractors working through umbrella companies have been able to offset ‘reasonable’ expenses like travel and accommodation against their tax bill to increase their take home pay.
The new Finance bill confirms a number of restrictions to this, particularly regarding how the new rules will be applied.
Budget 2015 confirmed that a review of contractors expenses and in particular travel & subsistence would take place in the summer of 2015 with potential changes being made for the tax year commencing 6th April 2016. It proposes that Supervision, Direction and Control (SDC) will be the key factors in deciding whether a contractor is genuinely a self-employed or should in fact be treated as an employee of the end client where they are working.
The new rules on travel and subsistence (T&S) tax relief came into force on 6 April. In the same week, unethical but legal tax systems, benefitting the very top of society, were exposed in the Panama Papers.
Umbrella.co.uk director Miles Grady explains why we need a change.
Last week was characterised by two big bits of finance news. The start of the new tax year brought planned T&S tax relief restrictions into force for many contractors.
Like other travel and subsistence reliefs, the rules for claiming accommodation expenses are changing from April 2016.
In the new tax year, contractors who have been ‘caught out’ by HMRC’s new tax rules will not be able to offset their accommodation expenses against their income, which could result in thousands of contractors paying more in tax.
Previously, the contracting community was concerned that these changes would affect everybody working through an umbrella or personal service company (PSC).
