Category: Travel & Subsistence Expenses

Balancing the Books

The Autumn Statement saw the very, very quiet announcement of new legislation which will, purportedly add £155 million to the Treasury’s coffers; in reality the move is likely to reduce the tax take for the Treasury by around £200 million and, at the same time, significantly reduce the take home pay of tens of thousands of hard working tax payers, otherwise known as voters.

It is thought that there are around 400,000 contractors or freelancers in the UK, who travel wherever and whenever their skills are needed, who will feel the negative impact of the proposed changes. This sector has been growing consistently as the cost of employing someone on a permanent basis rises; the value of temporary agency workers has been recognised by business and the Public Sector alike. The new legislation which will come into effect in April 2016 will mean that these workers will no longer have any entitlement to tax relief on the costs that they incur travelling to their temporary places of work.

Approximately 20,000 operate through umbrella companies who collect PAYE taxes on behalf of HMRC and give the workers Statutory Employment Rights. The only option these workers will now have to claim the tax relief, that has been allowable for the last 18 years, is to open a Limited Company (also referred to by HMRC as a Personal Service Company although this term has no meaning in law).

This presents a number of problems for the Government: |
• The VAT flat rate scheme will allow these workers to pay VAT at 13.5% of gross revenue rather than 20% of turnover; it’s estimated that this will cost HM Treasury around £20 million in a single year.
• Temporary workers who operate via a Ltd Company have to consider IR35, complex legislation which asks the tax payer to consider their employment status and which HMRC, by their own admission, find extremely difficult to police.

If just 50% of these workers operate outside the legislation the potential tax loss for the Treasury is around £175 million i.e. far more than the changes are expected to deliver. MP’s currently claim around £10 million per year in travel and accommodation expenses, so maybe asking them to follow the same rules that are being applied to their constituents could make up some of the shortfall. All they will have to do is provide evidence to HMRC that something intangible doesn’t exist!

The legislation requires the taxpayer to determine their employment status, for tax purposes only, based on whether or not anyone in the organisation they’ll be working for or the agency that may have found them the work could exercise supervision, direction or control over them and the way they work.

They also have to determine, if this is not exercised in practice, whether the organisation or agency would retain a ‘right’ to exercise it throughout the duration of the contract. HMRC cannot give examples of what may or may not constitute ‘evidence’ and the concept of supervision, direction or control whilst a common factor in case law has never been used as the only consideration for determining employment status. Add to this, two of the cases that HMRC use in their internal guidance found that the worker was subject to the right of supervision, direction and control but was not found to be an employee for tax purposes and two others are not available to the public for consideration and you can see why an industry representing around 400,000 workers is in a state of confusion.

Perhaps our MP’s could lead by example and demonstrate that they can prove that something doesn’t exist thereby securing tax relief on the travel costs that workers who don’t have their gold plated pensions and employment rights won’t be entitled to after 6th April.

Our meeting with HMRC to discuss the T&S changes due in April 2016.

The contracting industry has been in something of a turmoil since the proposed legislation changes to Travel and Subsistence were announced. One would hope that a trip up to Westminster to meet with the authors would help clarify matters but several AUCAE members were left flummoxed following a meeting with HMRC last week.

The legislation, which will affect both umbrella contractors and PSC contractors who are found to be inside IR35, is based on one ‘simple’ premise – if you are under supervision, direction or control, you can’t claim for tax relief on your T&S expenses. So, all we really needed to do was have a read through the case law in HMRC guidance, find out what evidence would be needed to prove status and bob’s your uncle! You would think wouldn’t you but no.

Firstly, the legal guidance from HMRC’s own Employment Status Manuals cites two cases (Market Investigations v Minister of Social Security: ESM0526 and Bhadra v Ellam: ESM2005), the transcripts from which are not actually available on line and cites two other cases in which there was found to be SDC but the worker was found not to be an employee (Ready Mixed Concrete v Minister of Pensions and NI: ESM7030 and HMRC v Talentcore: ESM7315).

When questioned about this HMRC’s representatives said that the outcome of the cases were not relevant but it was the judges’ comments on SDC that should be considered. In the Ready Mixed case MacKenna J said: “An obligation to do work subject to the other party’s control is a necessary, though not always a sufficient, condition of a contract of service (contract of employment). If the provisions of the contract as a whole are inconsistence with its being a contract of service, it will be some other kind of contract”.

So, that doesn’t really help us! In Talentcore, the only real references to SDC in the appeal were: “..there is an express finding that they [the contractors] would be working alongside the regular staff and be subject to the same control as such staff” and “…there was little supervision in practice but the FTT found that World Duty Free would be in a positon to give directions to these consultants” And yet, the workers were found not to be employees for tax purposes, so I am really not sure how that helps either.

Employment status has always been a thorny issue, in fact the OTS was quoted as saying that if they cracked it they would move onto World peace as they would obviously be on a roll! Despite this umbrella companies, accountants, contractors, agencies and clients are supposed to make a declaration using only one of the number of traditional determining factors without any useful guidance from HMRC. We have been advised that guidance will be forthcoming sometime towards the end of March – about a fortnight (if we’re lucky) before the legislation comes into force.

This subject exhausted and leaving all concerned desperately searching for a wall to bang their heads against, we moved on to the question that would be most crucial for agencies and umbrella companies – what would count as tangible evidence that SDC did not exist? (It was pointed out that expecting the tax payer to prove that something doesn’t exist was a tad unfair but still). This conversation was shorter and, in a nutshell, we were given no guidance whatsoever despite repeatedly asking the same question; we were merely referred to the legislation. Possibly out of desperation at this point, we questioned whether or not HMRC would concede that certain groups of workers would be extremely low risk e.g. a project worker brought in to a company where the skills he possessed were not to be found amongst the permanent workforce.

It was agreed that it was possible that certain groups of workers could fall outside of the legislation. Feeling that we were getting somewhere at last, we asked HMRC whether they would then confirm that this was the case if we provided examples. We were advised that they would not ‘give clearance’ on anything which basically means that we could present our arguments but they would tell us whether our determination was correct.

So, dear reader, I was hoping that a 2 hours meeting with HMRC’s representatives would have allowed me to provide a useful update on the forthcoming changes. Unfortunately, I left with no more clue on how to proceed than I arrived with. And a nasty headache. There seems to be no general consensus within the industry on the way forward and yet there are any number of ‘schemes’ being marketed which purport to ‘get round’ the legislation.

MSC’s seem to be making a come-back, presumably from individuals who don’t remember the 2007 legislation stopping them. EDM’s seem quite popular and new versions of EBT’s (combined with employee share schemes) are popping up all over the place. Some agencies are saying that everyone should go PSC and some are pushing their contractors towards umbrella companies. Whilst it’s true that PSC’s are exempt from this legislation unless their contract and working practices put them outside IR35, it’s worth pointing out that if you’re found to be inside IR35, this legislation will then come into force so you get a double whammy; repaying both unpaid taxes and tax relief from T&S.

One thing we can say about all of this, I believe without contradiction, is that everything is still as clear as mud.

All site based workers must be exempt from any proposed restriction to Travel & Subsistence.

If people fail to influence policy, then those people should not complain when that policy fails them. I-PAYE is backing calls from the freelance sector for an exemption from any legislation that will prevent Travel and Subsistence claims for site based workers that attend site to work on specific tasks / projects.

This is following discussions between industry representatives, the CBI, HM Treasury and HM Revenue & Customs in recent weeks. In the separate meetings the HMT and HMRC officials had been left in no doubt that the proposed restriction could be very detrimental to UK PLC. It is clear that the current test of Supervision, Direction and Control whilst achieving the current policy objective, fails when applied to site based workers.

In general site based workers attend a site to perform a task of limited duration and once it is completed they move on to a new site and new client. Many workers in IT, Engineering, Construction and Power work on several projects a year and fit this definition. Site based workers whether employed directly, operating through an Employment Intermediary or through their own Personal Service Company, had been the intended targets of the amendments in 1998 and this is clearly highlighted in HMRCs own internal manuals.

Before 6 April 1998 if you had been a site based worker or a Director through your own PSC, then any expenses reimbursed would have been subject to Income Tax and National Insurance. Applying SDC and the IR35 legislation to test whether a site is a temporary workplace, for site based workers, will result in many PSC and Umbrella workers being denied relief when those that are directly employed will be allowed to have T&S paid free of Income Tax. In correcting one unfairness HMRC have created another. If you are reading this article and are in one of the following categories then you might want to have your say. A site based worker that goes from project to project and is employed through an Umbrella.

Working on a site governed by a Working Rule or Collective Agreement. A site based worker that goes from project to project and is employed through their own Personal Service Company.* An agency consultant that provides site based workers to end user clients. A Professional Adviser who has site based worker clients. A Representative Body who has site based workers as members. Agency Representative bodies that have members who provide site based workers to end user clients. Clients who utilise site based workers for their projects and are concerned that rates may need to be increased for extra Tax and NI costs. *If a worker is found to be within IR35 then after 6 April 2016 any expenses reimbursed by the company, as well as dividends, will be re-categorised as earnings and subject to Tax and National Insurance, whether they are site based or not. IR35 is as subjective a test as SDC and open to interpretation and change as case law progresses.

If you believe that you or someone you know may be affected then you and they have until the 3rd of February to have your say on the draft legislation and can email your views to the HMRC Policy lead at I-PAYE have launched an e-petition to bring this matter to Parliaments attention, which contains more information and this can be viewed at Write to your MP and bring the issue to their attention.

Unsure of your MP then you can find out who represents you at Finally Don’t Keep this to Yourself. Please feel free to pass this email on to any person or contact you have. As the beginning of this article states doing nothing is not really an option.

Article written by Paul Hughes from iPaye.

Working through an agency, are you under supervision, direction or control?

HMRC have confirmed to AUCAE that, if you work through an agency, you will be considered to be under supervision, direction or control (or the right thereof) for the purposes of the new legislation surrounding tax relief on travel and subsistence expenses.

The changes which have been proposed and are currently under consultation will mean that any contractor supplying their personal services, whether through an umbrella company or a single person Limited Company (PSC) who is subject to supervision, direction or control or the right thereof by any person, will no longer receive tax relief on travel and subsistence expenses from April 2016.

The consultation document states that: “This test will be applied in a similar away to that currently used for agency workers in Section 44 (2) of ITEPA” [] Lisa Keeble, co-founder of AUCAE, questioned HMRC: “That section [44 (2) ITEPA] makes a presumption of SDC if the worker is engaged through an employment agency – will that be the case now?”

The response was brief but to the point “Yes, we will be replicating the revised section 44” Consequently, if the proposals go through, without alteration, then, regardless of whether there is supervision, direction or control in reality, it will be presupposed when contractors secured their contract through a recruitment agency.

AUCAE believes that these proposed changes will have a significant impact on the industry and also on the wider economy and would encourage contractors to voice their opinion. A ContractorUK regular know as Eek has set up a survey here and

AUCAE is also running a survey which has already had almost 400 responses . We would urge contractors to get involved in this consultation by completing either of these surveys before the deadline on 30th September 2015 especially as the recently published IR35 discussion document uses the same test of SDC and, presumably, the same criteria will apply.

Employee Travel and Subsistence Expenses –HMRC Consults

On 13th May 1996, HMRC issued a consultative document containing proposals to allow relief for travel and subsistence expenses incurred by site-based workers and to make the basis of relief “fairer and less complex”. This consultation generated an extremely large response, with 95% of those responding backing the proposal. Of the remaining 5% less than half advocated retention of the existing rules.

Click here for the full article.

Article by Alan Nolan Aspire Business Partnership LLP

AUCAE Launch National Contractor Survey

Following the Budget on July 8th, HMRC issued consultation documents that will undoubtedly transform the contractor market as we know it, with potential significant impacts on umbrella companies, PSC’s, agencies and even the end clients. AUCAE members met with HMRC on 20th July to discuss the consultations in more detail and try to gain clarity, in particular, around the “grey” area of Supervision, Direction and Control. Clarity seems quite a way away, but what was apparent in the meeting is that HMRC only received 3 individual responses from contractors when the original consultation was released. Perception could be that the impact on contractors would be minimal.

We know that this is not likely to be the case, however what we need is statistics / hard facts to be able to back up why the heavy restrictions surrounding who is eligible to claim T&S could have such a negative impact to both the Treasury and the economy as a whole. Which is where you come in, well you and our combined access to thousands of contractors who will more than likely be caught up in this…

AUCAE works hard to ensure that umbrella companies, contractors and agencies have a voice… a voice that can be heard! We urge you to distribute / share this survey link to contractors, agencies, and contacts within the industry, so that we get a say in shaping the future of the contractor market. But don’t forget to take the survey first!!!

Responses to the consultation document are due on 30th September 2015, with this in mind we have launched a National Contractor Survey to ensure that everyone in the industry has the opportunity to have their say. Deadline for submissions to the survey will be 23rd August 2015. All entries will be presented to HMRC as part of the AUCAE response document, they will also be sent to No.11 Downing Street, and the final response will be published at Many thanks for your support.

SHARE THE NATIONAL CONTRACTOR SURVEY TODAY: SHARE THE SURVEY LINK: EMBED THE SURVEY INTO YOUR WEBSITE: (function(t,e,n,s){var o,c,i;t.SMCX=t.SMCX||[],e.getElementById(s)||(o=e.getElementsByTagName(n),c=o[o.length-1],i=e.createElement(n),i.,i.async=!0,,i.src=[“https:”===location.protocol?”https://”:”http://”,””].join(“”),c.parentNode.insertBefore(i,c))})(window,document,”script”,”smcx-sdk”); Create your own user feedback survey


Employment Intermediaries and Tax Relief for Travel and Subsistence – Will losing tax free allowances affect you?

Will losing tax free allowances affect you?

It feels like a long time ago I was invited to offer my view, as a tax specialist, of the present situation that many contractors and temporary workers find themselves in, largely through no fault of their own. In fact, it was about 8 weeks ago but such is the pace of change in this area, the original theme I had in mind must now wait for another time. Instead I’d like to consider the Consultative Document issued on 8th July as part of the first Tory budget in 18 years, Employment Intermediaries and Tax Relief for Travel and Subsistence.

In short, HMRC is determined that expenses paid will no longer be tax free and has set a very low bar before relief is lost. Whilst there is some confusion about the issue date and consultation period, there is no doubt that responses have to be made by 30th September. The previous consultation in this area received 85 responses. Of these, just 3 came from individuals. This MUST change.

The Consultation itself admits that; “The government has received no evidence that changes in this area will impact negatively on the flexible workforce and we do not believe this will be the case.” In short, the Government is determined to ignore the comments from the professionals in this area for a variety of reasons. They may feel that they have a business to protect or some darker motives. People like me can run a fine toothcomb over the words in the document and draw inferences and implications that may be perfectly correct but are not as telling as real stories of financial pain So how can this evidence be collected, collated and presented?

The responsible Umbrella companies have been active in this process already and can and I’m sure have acted to bring their thoughts to the Government in the previous consultation. Given the role they have in this area, they are best placed to bring together the experiences and fears of individuals.

Alternatively stories can be collected in an external source (accountant, law firm, recruitment agency) and subsequently submitted from there. Why is this important? Because it will reduce the amount of income you receive. The proposal is that the currently tax free allowances for travel to and from temporary workplaces and for subsistence will be taxable in pretty much every case from 6th April 2016. The test is based on a very simplistic view of whether the work you do is “supervised, directed or controlled” by another person. Where this is the case, you will be treated as an employee of the engaging company and no tax free allowances can be paid.

The examples used in the document are frankly laughable. For example, a company wants an online catalogue of goods that customers can order from. If an IT contractor is given pictures of the goods and a price list, goes away and produces in due course a complete website with functioning order book without further reference to the company, he is self employed. Really? How can anybody actually imagine this is how commerce works? If that is an example of just how independent you have to be in order to retain the tax free allowances (at the expense of the normal employment law protections) it’s easy to see why HMRC consider that this measure will net them £635 million over the next 4 years.

How will this tax be collected? The proposal is that the company who engages your services or the umbrella or other intermediary will be responsible. I’m sure that both of these will have issues with taking on the responsibility, especially as penalties for non compliance are part of the package.

There is clearly a Government concern that some in this area are less than honest and as such it would not be impossible to see both entities have some responsibility and liability here. More worrying is the prospect of a repeat of the position many contractors find themselves in. Many used intermediaries to operate through from the late 1990’s. Despite HMRC making some vague and largely unnoticed warnings and failing to intervene, they are now issuing demands for several year’s worth of tax. It is arguable that the agency is at least partly culpable in the very tough position many now find themselves in. The consultation here carries no hint that HMRC should be given powers to intervene, if necessary closing intermediaries and taking control of tax deductions themselves rather than permit a continuation of what they know is illegal practices.

They do promise that their investigations and compliance checks will be stepped up, but given the usual pace of these, if there is a problem the guilty parties will be history long before HMRC arrive on the scene. For a great many people the dividing line between employment and contracting is already too difficult to arrive at an easy answer. For many the services offered by Umbrella intermediaries was the answer as the responsible operators in that market took great pains to ensure compliance. That certainty is going to disappear in April 2016. The tax situation around travel and subsistence payments is perhaps the thin end of the wedge and is those who engage your services understand this, they will become more wary of their potential obligations as employers.

The time to act is now.

There is a need to collect information on how these rules will reduce individual’s income, increase employer costs, lead to obligations and potential disputes and irreparably damage the flexible labour market. HMRC is already starting from the flawed premise that if you do the same work as a permanent employee, you must also be an employee.

Why? There is no logic in that proposition. AUCAE are looking to collate responses which should be should be completed online by 30 September 2015 at

All responses will be provide to HMRC and sent to No11. Downing Street by All Umbrella Companies Are Equal. Do not ignore this. Your Umbrella will undoubtedly help you if asked, but give HMRC your thoughts and views on how losing these tax free allowances will impact you.

Graham Webber is a Director of WTT Consulting Ltd, a tax enquiry resolution specialist firm which operates in the contractor sector. He can be contacted on

Employment Intermediaries – Travel and Subsistence (Part 3)

It may have been missed by most, but the consultation on Travel and Subsistence is also proposing a change for individuals supplied by agencies on sites governed by Working Rule Agreements. At Present (Source EIM71319)

Where Construction Industry Workers are supplied by agencies to work on sites, and they are employed within the terms of a working rule agreement, the payment of travel and lodging allowances may be made in terms with the relevant agreement. This means that travel and lodge allowance up to a stated rate can be paid free of Income Tax and National Insurance. Consultation Says (Page 22)

If a worker is employed through an employment intermediary and subject to supervision, direction or control they will no longer be due tax relief on their home to work travel and subsistence. Where that worker is employed in the construction and allied sectors under a Working Rule Agreement, then the special taxation procedures that HMRC has agreed that all travel and lodging allowance paid under such agreements to be paid tax and NICS free will not apply.

Tax Relief will still be due on a case by case basis where a worker can demonstrate that they are entitled to relief under the statutory rule. In English then when the allowances are paid in future, assuming the legislation goes through as is, then PAYE and NIC will be applied at source.

Many agencies provide workers to Contractors that work on sites governed by WRA and it seems that HMRC, possibly with influence from the Unions, don’t want that to continue as you can’t see a worker on a WRA site accepting that his Lodge and Travel is taxed and subject to employees NIC, but a direct employee of the contractors isn’t. Also will contractors being willing to pay an extra 13.8% on the Lodge and Travel that it can pay a direct employee even if they are on a Fixed Term contract. ECIA Member Agencies may wish to bring this to the ECIA’s attention.

Article wrote by Paul Hughes, I-Paye

Employment Intermediaries – Travel and Subsistence (Part 2)

Worker Groups It is clear from the consultation document that HMRC believe that all workers employed by an Umbrella or a PSC are using the rules to avoid tax, but is that really the case. As HMRC have jumped straight from discussion to proposed legislation without undertaking a proper consultation then they seemed to have missed the fact that their own guidance differentiates between worker types.

Group 1: Site Based Workers with No Permanent Workplace Task of Limited Duration Site based workers that attend a site to complete a task of limited duration. Limited Duration is defined as less than 24 months. Most employees have a permanent workplace, and most employees have only one permanent workplace. But there are some employees who have nowhere they attend regularly other than to perform tasks of limited duration or for a temporary purpose. Many site based employees are in this position. They do not have a permanent workplace. This means that they do not have an ordinary commuting journey, so from 6 April 1998 they are entitled to relief for all journeys from home to the temporary workplaces they have to attend to perform the duties of their employment. It is clear that site based workers that move from task to task where clearly intended to be allowed a deduction for Travel, assuming other test are satisfied and it is not believed that HMRC are looking to amend this part of the legislation, as it seems to work as intended.

Group 2: Attendance for a Temporary Purpose An employee may attend a workplace and perform duties there which are not of limited duration without that workplace becoming a permanent workplace, provided each visit is temporary. Example: Fred is a safety officer. He regularly visits a particular factory every month to carry out a safety check. His responsibility for that factory has been a duty of his employment for a period spanning twenty years (so it is not of limited duration). However, the tasks he performs on each visit are self- contained and the purpose of each visit, considered alone, is temporary. So relief is available for the full cost of travel. Where a visit is self-contained (that is, arranged for a particular reason rather than as part of a series of visits to the same workplace for the continuation of a particular task) it is likely to be for a temporary purpose.

HMRC Examples:

Gail is the finance director of a large company based in Scunthorpe. Once a month her duties take her to the company’s production unit in the South East. Her visits are to consider individual investment proposals but she takes the opportunity to discuss local welfare issues as a representative of senior management. The purpose of the visits is not linked, each one is self-contained. So the production unit is not Gail’s permanent workplace and she is entitled to relief for the full costs of business travel.

Gaston lives in Sidcup and has a permanent workplace in Broadstairs. He is a director of a company which has a number of regional offices. He has to attend a director’s meeting on the last Friday of each month in Farnham. Although the directors’ meetings are regularly held in the same place, Farnham does not become a permanent workplace for Gaston because each visit is for a temporary purpose. So he is entitled to relief for the costs of his travel from home to Farnham.

Gemma is employed as a school teacher in Oswestry which is her permanent workplace. Every fortnight she goes to an education authority meeting in Bridgnorth. She is entitled to relief for her travel from home to Bridgnorth because while she goes there regularly each visit is for a temporary purpose. Unless a worker is attending a site to perform a task of limited duration or for some other temporary purpose that is either self-contained the relief should be denied under the existing rules.

It seems that there are three groups of workers:
1. Employees that attend site to perform a task of limited duration.
2. Employees that attend sites regularly for a self-contained temporary purpose.
3. Employees that are engaged on fixed term, agency or other employment contract that are neither 1 nor 2.

By adding the control, direction and supervision test, it would seem to suggest that HMRC are seeking to apply a test that would allow them to assign a debt to an agency where the rules have been applied incorrectly, but it should be limited to those situations where the attendance is not a temporary purpose.

Article wrote by Paul Hughes, I-Paye

Employment Intermediaries – Travel and Subsistence (Part 1)

Having read the recently issued consultation document it seems that HMRC believe that they have a silver bullet in the application of control, direction and supervision (CDS) when applying this test to contractors and temporary workers.

As an employment status indicator then if you are CDS then you are treated for tax purposes as an employed earner. However, it seems illogical to use the same test to deny employees travel and subsistence costs, unless CDS doesn’t apply which means that you are self-employed.

We now face the real prospect that may of our key contracting sectors, IT, Engineering, Pharmaceutical, Construction, Power and Energy, Ship Building and Fabrication will be faced with increased costs when utilising itinerant workers sourced locally or from further afield, with some of these sectors in the Northern Power House already struggling to be competitive in competing internationally then you do wonder whether many industries may seek to relocate to the more favorable regimes in Norway and the Netherlands that seem to understand that British workers are a valuable resource they would like to utilise.

We must seek to educate those that we have elected in to power that these workers are unique in that as they generally are project based or as HMRC put it are working on a task of limited duration, they are precisely the types of workers the rules had been changed in 1998 to benefit. They may or may not be under the Control, Direction or Supervision of someone, but it is not the easiest test to apply and any test that relies upon case law for its definition will leave many within the supply chain uncertain as to whether they are making the correct decision.

Whilst the above groups should be protected from any rule amendments, it is clear that if someone looks like an employee then they should be treated as attending a permanent workplace, even if they are only there for a temporary purpose.

Workers in Health, Teaching, Local Authorities, Call Centre Staff and Warehousemen it is clear had never been the intended beneficiaries to the rule change in 1998. As HMRC state in their consultation it was never Parliaments intention to allow all temporary workers to claim for travel to and from site. However, it was Parliaments intention to allow site based workers to claim relief that they had previously been denied. Here is what HMRC said in the December 1997 Tax Bulletin 32 “Most employees have a permanent workplace, and most employees have only one permanent workplace. But there are some employees who have nowhere that they attend regularly other than to perform tasks of limited duration or for some other temporary purpose.

Many site based employees are in this position. They do not have a permanent workplace. This means that they do not have an ordinary commuting journey, so from 6 April 1998 they are entitled to all journeys from home to the temporary workplace they have to attend to perform the duties of their employment.” It is interesting to note that as most temporary workers do not attend site to perform a task of limited duration then they should have been denied relief under the existing legislation as they did not attend for a temporary purpose, which it seems was meant to be for a self- contained reason. Tax Bulletin 32 and 33 can be found in the National Archive.

So do we need an extra layer of legislation to ensure that the rules are now correctly applied?

The answer seems to be yes, until there is a re-write of the rules, but it should be written to ensure that the CDS test is only applicable to the temporary purpose part of the test, leaving those that choose to operate through a PSC or an Intermediary and are performing a task of limited duration.

One final observation to leave you with on how the consultation could lead to a new unfairness the result of two workers working on the same site. Worker 1 is a supervisor directly employed by construction company A who he has worked for many years on projects up and down the UK, he never attends head office. His employer reimburses him the cost of his accommodation, travel and subsistence tax free as he is directly employed. Worker 2 during the course of the year works on numerous sites for many clients, he is brought in to perform a task of limited duration and is supervised, directed and controlled by worker 1. His Umbrella Company invoices for his time and expenses that are billed to the end user client. These expenses, it seems would now be subject to Income Tax, Employers and Employees National Insurance.

Article wrote by Paul Hughes, I-Paye