TT245: Travel and Subsistence – Recent Legislative Changes

June 16, 2016

The Finance Bill 2016 contained full details of the changes which came into effect from 6 April 2016. These primarily affect the ability of employed workers to reclaim travel and subsistence expenditure where an employment intermediary (i.e. an umbrella employer and agency or a personal service company) is involved, and will largely depend on the Supervision, Direction and Control (SDC) over the manner in which the services are provided.

The rules apply where an individual (the worker):-

  1. personally provides services (which are not specifically excluded) to another person (the client) and
  1. these services are not provided under a contract directly between the client or a person connected with the client and the worker, but under arrangements involving an employment intermediary.

In addition for the purposes of these regulations each engagement will be regarded as a separate employment and the rules will not apply if it can be demonstrated that the worker is not subject to any supervision, direction or control in providing the services.

The overall effect of the new rules is that:-

Where an individual personally provides services to a client through a third party (an employment intermediary) each workplace in which he or she operates will be treated as a permanent workplace and any expenses cannot be reimbursed to that individual tax free unless it can be shown that the manner in which these services are provided is not actually subject to any supervision, direction or control.

If you think that you may be affected by the new rules please contact your Barnes Roffe partner for further guidance.

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