"Consultation" on Employment Intermediaries and Tax Relief for Travel and Subsistence

[TheFaQQer]

As per the budget, the "consultation" paper is out - https://www.gov.uk/government/consul...nd-subsistence

At first glance, it might appear that it's only if you are inside IR35 because it makes reference to direction and control. Bear in mind that this could well hit any contractor who travels or stays away near the client, it's not just the IR35 caught ones.

[tractor]

.....

As per the budget, the "consultation" paper is out - https://www.gov.uk/government/consul...nd-subsistence

At first glance, it might appear that it's only if you are inside IR35 because it makes reference to direction and control. Bear in mind that this could well hit any contractor who travels or stays away near the client, it's not just the IR35 caught ones.

Following the recent trend, regardless of who they say legislation is not aimed at, it will ultimately apply to all as per the 'reporting requirements'.

[PTP]

Bear in mind that this could well hit any contractor who travels or stays away near the client, it's not just the IR35 caught ones.

In case anyone else is wondering how can someone be outside IR35 and caught by the expenses rules, but isn't in the mood to read the document yet, here is the paragraph:
The intention of these proposals is that personal service and the exercise of (or right to) supervision, direction or control will be the only criteria HMRC will consider when ensuring the appropriate application of the new rules for travel and subsistence. This will differ from the current application of IR35 where a broader range of factors are considered when deciding the status of a contract, including financial risk and substitution (whether a worker can send someone else to fulfil their obligation).

First time I've seen them give definitions of supervision, direction and control (Pg14).


There seems to be a strong focus on mileage/train fare and lunch. My question is, does accommodation count as travel and/or subsistence like I thought it did, or for some other reason come under the scope of these proposed rules?

If it does then it's stupid how they think this will make things level for employees and contractors. Since when have employees been so flexible that they worked somewhere 200 miles from home and ended up with a mortgage/rent in one city and rent/B&Bs in another?

[SueEllen]

This government is backwards.

Far better to give everyone tax relief on the standard commuting cost to their place(s) of work. Would encourage everyone to work, make people more flexible in their location and people wouldn't rush to use an umbrella.

And yes some other European countries do it.

BTW I've been at clients with permanent employees who do the same as us for a year or two to get ahead.

[Jessica@WhiteFieldTax]

@PTP - yes, accommodation counts as part of T&S, just as it does for the existing (and remaining of course) 24 month rule.

Although they are talking about D&C at present, and there are some very strange liability transfer rules proposed, I'ld expect this to come out of consultation as IR35 criteria.

We were promised - somewhen - a more substantive review of T&S in general. That's overdue, what we have now is overly complex for employees, employers, company directors/PSCs and the self employed (who by statute can't claim anything, but in practice claim under a parliamentary written answer recorded in Hansard from - if memory serves me right - about 1976)

[malvolio]

I've a sneaky feeling this is part of a longer term plan to address genuine disguised self employment, i.e. the case where employer and employee gain from pretending the latter is a freelance. In other words, IR35 isn't really working so let's make the advantages less attractive. Watch out for more of the same (the divi changes are only a beginning I suspect).

The solution ifs of course to ensure you are genuinely out of scope as an independent contractor not under D&C - but that has been the case for a long time now.

[eek]

I've a sneaky feeling this is part of a longer term plan to address genuine disguised self employment, i.e. the case where employer and employee gain from pretending the latter is a freelance. In other words, IR35 isn't really working so let's make the advantages less attractive. Watch out for more of the same (the divi changes are only a beginning I suspect).

The solution ifs of course to ensure you are genuinely out of scope as an independent contractor not under D&C - but that has been the case for a long time now.

You miss out the biggest bug bear HMRC probably have with the system.

Its not the cases where both the employer and employee gain from pretending the latter is freelance, its the many many cases where the employer gains while the employee is at best no better off and often far worse off..

Having been down in London yesterday I've not had a chance to look at things.. The one thing I can now say is that the IPSE offices are very central,,,,

[BolshieBastard]

I've a sneaky feeling this is part of a longer term plan to address genuine disguised self employment, i.e. the case where employer and employee gain from pretending the latter is a freelance. In other words, IR35 isn't really working so let's make the advantages less attractive. Watch out for more of the same (the divi changes are only a beginning I suspect).

The solution ifs of course to ensure you are genuinely out of scope as an independent contractor not under D&C - but that has been the case for a long time now.

No tulip!?

[mudskipper]

The solution ifs of course to ensure you are genuinely out of scope as an independent contractor not under D&C - but that has been the case for a long time now.

The twist here is that tax liability for incorrectly paid expenses can be passed to the client (p16), so clients will simply refuse to engage you unless you guarantee that you will not claim expenses.

[Danglekt]

It will be interesting to see the smart folks on here outline if a company car and paid personal mileage now becomes a "vehicle" for this.

No good if you use hotels, but the commuter types might be interested...