HMRC Travel and Subsistence Consultation

Following the Budget on July 8th, HMRC issued consultation documents on the Travel and Subsistence Legislation that will undoubtedly transform the contractor market. It could have potential significant impacts on umbrella companies, PSC’s, agencies and even the end clients.

AUCAE meet with HMRC

AUCAE met with HMRC on 20th July to discuss the HMRC Travel and Subsistence Consultation in more detail. Our aim to try to gain clarity, in particular, around the “grey” area of Supervision, Direction and Control. Clarity seems quite a way away! What was apparent in the meeting is that HMRC only received 3 individual responses 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. This will enable us to be able to back up why the heavy restrictions surrounding who is eligible to claim T&S could have such a negative impact. An impact on both the Treasury and the economy as a whole.

AUCAE launch National Contractor Survey

In August 2015, AUCAE launched a National Contractor Survey in response to the T&S announcements. The response from contractors has been outstanding with over 700 contractors airing their concerns over the proposed changes.

All entries will be presented to HMRC as part of the AUCAE response document. These will be submitted by the 3th September, they will also be sent to No.11 Downing Street.

A huge thanks to all those contractors for your support.

“AUCAE works hard to ensure that umbrella companies, contractors and agencies have a voice… a voice that can be heard!”

So what next?

MP Template Letter in response to the T&S changes proposed by HMRC.

HMRC are planning to introduce new rules in April 2016, which will effectively stop most contractors claiming tax relief on the money that they spend travelling to their various contracts. It is entirely possible that MP’s are completely ignorant of the effects that these changes will have on the UK’s flexible workforce. So we are asking you to use the points listed below in a letter or email to your local representative.

1) An introductory paragraph…

I’m a highly skilled contractor engaged on a series of assignments, each of limited duration and often the workplace is some considerable distance from home. Legislation requires me to be treated as an employee, each workplace is regarded as a “temporary” workplace. I am allowed to claim tax relief on the cost of travel and overnight accommodation.

2) Then a paragraph about the MP…

You Mr/Mrs/Miss MP will recognise that lifestyle because like me your work in Westminster takes you away from home. Like me you are allowed to receive tax free reimbursement of travel and accommodation costs.  If you like you could say that’s as it should be, it would be unreasonable to expect you to foot the bill to get from home to Westminster to carry our Parliamentary business.

From 6th April 2016, you will still be able to receive tax free reimbursement of travel and accommodation costs. However because of legislation, which you are presumably aware of, I will no longer be able to claim tax relief on the cost of travel and overnight accommodation. As one of your constituents, will you please let me have your considered justification for this attack on contractors and reasons why, if this change applies to me it does not apply to you

3) Conclusion…

This needs to be a hard hitting paragraph on the lines that if the change comes into effect then the constituent faces two options. He/she will either refuse to make their expertise available other than within short distances of their home leading to skill shortages in remote locations and on major projects, or they will demand ever increasing rates for their services and thus increase the costs to businesses generally.