The government’s long awaited draft legislation on travel & subsistence (T&S) was published today following November’s Autumn Statement.
It states Individuals working through umbrella providers will NOT be allowed to claim tax relief on their T&S expenses and provided clarity on where financial liability lies, when workers fail to pay the correct amount of tax. Following a further period of consultation on the technical aspects of the bill, which closes on 3 February 2016, the new legislation is set to become law on 6 April as part of the Finance Bill 2016.
HEADS Recruitment offer a quality bespoke workforce solution, and payroll all our Agency Workers inhouse by PAYE. If you have concerns how this legislation affects your business, and you require a fully compliant provider, please feel free to contact HEADS to discuss how we can help.
HERE ARE THE KEY POINTS
Individuals working through umbrella providers will not be allowed to claim tax relief on their T&S expenses, where the worker is under supervision, direction or control (SDC) in the manner in which they carry out the work.
Individuals that work through a personal service company will not be allowed to claim tax relief on their T&S expenses where the intermediaries legislation (IR35) applies, and they are not deemed as genuinely self-employed.
End clients and recruitment companies will be potentially liable for a worker’s unpaid tax, where they provide fraudulent or misleading information to the payment intermediary. So if a recruiter tells the employment intermediary SDC doesn’t apply and the payment provider then pays T&S expenses tax free, however then HM Revenue & Customs decides SDC does apply, it will be the recruitment company and its directors or the end client that will be liable for the shortfall.
However, in normal circumstances it is the employment intermediary and its directors that would hold liability. For example, if SDC does apply but the employment provider allows the worker to claim T&S expenses when they shouldn’t have, the debt will sit with the employment provider (the intermediary).
Source: Recruiter Magazine 09/12/2015