Food For Thought T&S

[pjt]

First post folks. I have been following the recent proposal's from HMRC with horror, the most concerning to me is the T&S changes. This would effectively kill my business. Did anyone else get an email from Contractor Weekly detailing an updated paper which appears to suggest its only daily expenses that would be impacted...

"Abolishing daily subsistence relief would prevent contractors from being able to claim the cost of lunch whilst on a business journey. Such an expense, it is argued, is effectively a private expense. However, overnight subsistence such as the cost of a hotel room, or an evening meal/breakfast whilst staying away from home overnight on a business journey would not be affected."

Fully link here.

Food for thought - Contractor Weekly

Is this wishful thinking or am I missing something?

[yakitoo]

Is this wishful thinking or am I missing something?

I suspect that "......Neither will the government change the restrictions of travel and subsistence relief for employees working through employment intermediaries." might be the significant part.

[DaveB]

I suspect that "......Neither will the government change the restrictions of travel and subsistence relief for employees working through employment intermediaries." might be the significant part.

Thats essentially the current situation re. inside / outside IR35. If you are inside you cant claim T&S, just a flat 5% expenses allowance. If outside then the new proposals would apply. The crunch will be on the changes to SD&C and the impact on IR35 status that follows.

[pjt]

Thats essentially the current situation re. inside / outside IR35. If you are inside you cant claim T&S, just a flat 5% expenses allowance. If outside then the new proposals would apply. The crunch will be on the changes to SD&C and the impact on IR35 status that follows.

Dave
Is that the case though? I always thought IR35 meant no T&S. But reading up the 5% flat rate expenses appears to be on top of T&S. See below

Calculating your salary under IR35 - The Interim Hub - for all things Interim

Cheers

Paul

[TheFaQQer]

I suspect that "......Neither will the government change the restrictions of travel and subsistence relief for employees working through employment intermediaries." might be the significant part.

That would be my take on it - it's aimed at employed consultants. It refers to an "employed IT contractor", but what it means is "someone working for a Professional Service Company", I suspect.

[pjt]

That would be my take on it - it's aimed at employed consultants. It refers to an "employed IT contractor", but what it means is "someone working for a Professional Service Company", I suspect.

The way I read that though is that current restrictions wont be affected. As I said above as far as I understand even under IR35 at the moment T&S is allowed on top of the 5% flat rate. So surely even if they catch us all with IR35 the T&S changes may not be as bad as first indicated.

I suspect I'm clutching at straws but hope I'm not.

[jamesbrown]

The way I read that though is that current restrictions wont be affected. As I said above as far as I understand even under IR35 at the moment T&S is allowed on top of the 5% flat rate. So surely even if they catch us all with IR35 the T&S changes may not be as bad as first indicated.

I suspect I'm clutching at straws but hope I'm not.

I'm not sure I follow what you're saying here, but T&S is not part of the 5% allowance, which is for administration only, and any changes to T&S are separate from those w/r to IR35 (that is part of the criticism), so any changes will also affect those currently inside IR35. This is my understanding of the proposed scenario:

Ordinary commuting, subject to SDC (which may or may not currently imply inside IR35): no T&S relief
Ordinary commuting, not subject to SDC (which currently implies outside IR35): T&S relief
Business travel: T&S relief
Daily subsistence (separate proposal): no T&S relief
Overnight subsistence (separate proposal): T&S relief

The important distinction here is between "ordinary commuting" and "business travel". Business travel (including that of employees) attracts relief, and there are no proposals to change that.

[pjt]

I'm not sure I follow what you're saying here, but T&S is not part of the 5% allowance, which is for administration only, and any changes to T&S are separate from those w/r to IR35 (that is part of the criticism), so any changes will also affect those currently inside IR35. This is my understanding of the proposed scenario:

Ordinary commuting, subject to SDC (which may or may not currently imply inside IR35): no T&S relief
Ordinary commuting, not subject to SDC (which currently implies outside IR35): T&S relief
Business travel: T&S relief
Daily subsistence (separate proposal): no T&S relief
Overnight subsistence (separate proposal): T&S relief

The important distinction here is between "ordinary commuting" and "business travel". Business travel (including that of employees) attracts relief, and there are no proposals to change that.

James thanks that's cleared it up. Yes it appears I was clucking at straws and had missed the difference between business travel and ordinary commuting! Oh well.

Of all the current proposals I can live with the T&S least and I actually think this would be the end for me. Its that bad being forced to work inside IR35 would actually be a better option for me! I'm guessing we can only pray for a miracle ahead of the Autumn budget

[PurpleGorilla]

I read the CW article but I confused as hell.

If I take a trip to a client site from my home-office (registered address) - can I still claim the miles.

If not, WTF not!

[TheFaQQer]

I read the CW article but I confused as hell.

If I take a trip to a client site from my home-office (registered address) - can I still claim the miles.

If not, WTF not!

It'll all become clear soon enough - who ever heard of the government not providing absolute clarity in the rules?