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PayStream's Opinion – Travel and subsistence consultation

Paystream News

Julian Ball

Friday 28th Aug, 2015

As many recruiters will be aware there is a consultation going on at the moment about what to do about travel and subsistence expenses for contractors. Unsurprisingly one of HMRC's proposals (in order to raise more tax) is to restrict the claims for travel and subsistence for contractors that are travelling to sites.

Under the proposals this will only happen where contractors are supervised directed or controlled (SDC) on site or where the contract allows the right of SDC. In reality this would catch most contractors whether they be agency PAYE workers, umbrella employees or have their own PSC.

The consequences would likely be:

  • A reduction in take home pay for contractors.
  • A refusal by contractors to travel to sites that are located away from home. Agencies placing contractors in rural areas or difficult to access sites may see a talent shortage.

I should stress that, at this time, this is only a consultation and not legislation but there is a possibility that new legislation could be introduced with effect from April 16. This is certainly HMRC's preferred option. Interested parties including agencies and contractors have until 30 September to make their feelings known.

In order to learn more about the proposals agencies are able to attend (free of charge) an audience with HMRC and various law firms who will discuss the proposals. The events will be held in Manchester at the Hilton Deansgate on 8 September or in London at the Kings Fund on 9 September. Both start at 1.30pm.

The events are organised by PRISM, a not for profit trade association which represents the service provider sector. Each event will include speakers from HMRC who will be presenting and discussing in detail both the T&S consultation and the IR35 Discussion document. There will also be a speaker from a top legal firm discussing the proposals and the impact this could have on current operational structures and offerings. All agencies are welcome to attend to discuss possible changes and can reserve their place at the conference here.

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