Received today from HMRC...
Travel and subsistence expenses for workers engaged through employment intermediaries
Note on the effect of the legislation
The government introduced legislation in clause 14 of the Finance Bill 2016 restricting relief on home-to-work Travel and Subsistence (T&S) expenses for workers engaged through an employment intermediary. The changes put those workers on the same terms as all others contracted directly, or through an agency contract. They took effect from 6 April 2016.
An unintended consequence has been identified affecting the application of these changes for most employment intermediaries, but not personal service companies and managed service companies. To resolve this, the legislation will be amended at the earliest opportunity. HMRC does not consider this change will affect the vast majority of workers currently engaged through employment intermediaries.
Current Application
The government announced at Autumn Statement (AS) 2015 it would restrict tax relief on T&S expenses to workers who supply their services through an employment intermediary and carry out their work under supervision, direction or control. For individuals working through personal service companies, relief would be restricted where the intermediaries legislation (IR35) applies, or where the worker would be considered an employee if engaged directly with the client.
Due to a technical point in the legislation, the restriction that came into force on 6 April 2016 does not reflect the restriction that was announced at AS 2015. So, rather than consider whether a worker is under supervision, direction or control, employment intermediaries (including umbrella companies) need to consider whether the worker would be an employee if engaged directly by the client.
The only exception to this rule is workers who are engaged through managed service companies. The restrictions apply to these workers where they are under supervision, direction or control.
Where a worker’s circumstances are such that they would be properly considered as self-employed if engaged directly, the new legislation will not apply.
Full guidance on these changes is being published on gov.uk.
Although the test used in the current legislation is different to what was announced at AS 2015, those who are working under supervision, direction or control would, in the vast majority of cases, be considered an employee if engaged directly with the client. Therefore both tests should produce the same result and this change will have a minimal effect on the individuals concerned.
Correcting the legislation
The government considers the use of a full test of employment status to determine eligibility for relief on T&S expenses to be disproportionate and burdensome for the businesses who will need to consider this legislation. It believes the simpler test of supervision, direction or control will help ensure compliance with these rules. For these reasons, the legislation will be updated at the earliest opportunity to reflect the announcement made at Autumn Statement 2015.
This amendment will ensure workers engaged through an employment intermediary will need to consider whether they are under the supervision, direction or control (or right thereof) of any person, in how they do their work. Those engaged through a personal service company will continue to be required to use the test used within the intermediaries legislation.
Travel and subsistence expenses for workers engaged through employment intermediaries
Note on the effect of the legislation
The government introduced legislation in clause 14 of the Finance Bill 2016 restricting relief on home-to-work Travel and Subsistence (T&S) expenses for workers engaged through an employment intermediary. The changes put those workers on the same terms as all others contracted directly, or through an agency contract. They took effect from 6 April 2016.
An unintended consequence has been identified affecting the application of these changes for most employment intermediaries, but not personal service companies and managed service companies. To resolve this, the legislation will be amended at the earliest opportunity. HMRC does not consider this change will affect the vast majority of workers currently engaged through employment intermediaries.
Current Application
The government announced at Autumn Statement (AS) 2015 it would restrict tax relief on T&S expenses to workers who supply their services through an employment intermediary and carry out their work under supervision, direction or control. For individuals working through personal service companies, relief would be restricted where the intermediaries legislation (IR35) applies, or where the worker would be considered an employee if engaged directly with the client.
Due to a technical point in the legislation, the restriction that came into force on 6 April 2016 does not reflect the restriction that was announced at AS 2015. So, rather than consider whether a worker is under supervision, direction or control, employment intermediaries (including umbrella companies) need to consider whether the worker would be an employee if engaged directly by the client.
The only exception to this rule is workers who are engaged through managed service companies. The restrictions apply to these workers where they are under supervision, direction or control.
Where a worker’s circumstances are such that they would be properly considered as self-employed if engaged directly, the new legislation will not apply.
Full guidance on these changes is being published on gov.uk.
Although the test used in the current legislation is different to what was announced at AS 2015, those who are working under supervision, direction or control would, in the vast majority of cases, be considered an employee if engaged directly with the client. Therefore both tests should produce the same result and this change will have a minimal effect on the individuals concerned.
Correcting the legislation
The government considers the use of a full test of employment status to determine eligibility for relief on T&S expenses to be disproportionate and burdensome for the businesses who will need to consider this legislation. It believes the simpler test of supervision, direction or control will help ensure compliance with these rules. For these reasons, the legislation will be updated at the earliest opportunity to reflect the announcement made at Autumn Statement 2015.
This amendment will ensure workers engaged through an employment intermediary will need to consider whether they are under the supervision, direction or control (or right thereof) of any person, in how they do their work. Those engaged through a personal service company will continue to be required to use the test used within the intermediaries legislation.
- we have seen more emerging believing that they have a "new" concept!! I will be reading, and rereading and rereading then attempting to translate into English 
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