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Budget 2015 Travel and Subsistence Clampdown: What does this mean for contractors?

15 January 2016


This week, PRISM, the not for profit trade association representing the service provider sector, hosted a high profile event for providers, recruitment companies and end clients with speakers from HMRC.

HMRC presented and discussed in detail both the Travel and Subsistence Consultation and the IR35 Discussion Document. From April 2016, workers employed through intermediaries such as umbrella companies or personal service companies who are working inside IR35, will no longer be liable to claim for travel and subsistence costs as expenses and incur tax relief on these costs. However, these new rules will only apply to workers who are under the supervision, direction and control of their end-client, or are essentially working inside IR35. 

So what does this mean for contractors? We caught up with Kate Young, Compliance Manager for Oliver James Associates, who explained that it’s currently unclear whether this approach will actually allow the outstanding issues to be clarified as it may actually cause further confusion for contractors. The main challenge that lies ahead now is how to prove contractors working through an employment intermediary are not under the client’s supervision, direction and control and how this will be policed.

Further details are yet to be announced by HMRC so for now it’s a waiting game to see whether there will be a greater impact on contractors and umbrella companies alike. 

To read further information on this clampdown, read the official HMRC document.

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