Just received this from our contact at HMRC

[LisaContractorUmbrella]

Travel and Subsistence

The Chancellor made the following announcement today:

3.20 Employment intermediaries and tax relief for travel and subsistence – As confirmed at Summer Budget 2015, the government will legislate to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company. Following consultation, relief will be restricted for individuals working through personal service companies where the intermediaries legislation applies. This change will take effect from 6 April 2016.
April 2016.

The text is at chapter 3.20 in the Blue Book - follow the link:

https://www.gov.uk/government/upload...Accessible.pdf

Draft legislation will be published on 9 December.

Intermediaries legislation - IR35

As you know the government announced at the Summer Budget that HMRC would engage with stakeholders over the summer about the best way to reform the intermediaries legislation (IR35). A discussion document was published on 17 July and HMRC received over 160 written responses in addition to 14 roundtables with stakeholders.

The government is considering responses to the discussion document. The government’s objective as set out in the discussion document is to find a solution that protects the Exchequer and improves fairness in the system without creating disproportionate burdens on business, or widening the scope of the rules.

[MarkT]

Travel and Subsistence

The Chancellor made the following announcement today:

3.20 Employment intermediaries and tax relief for travel and subsistence – As confirmed at Summer Budget 2015, the government will legislate to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company. Following consultation, relief will be restricted for individuals working through personal service companies where the intermediaries legislation applies. This change will take effect from 6 April 2016.
April 2016.

The text is at chapter 3.20 in the Blue Book - follow the link:

https://www.gov.uk/government/upload...Accessible.pdf

Draft legislation will be published on 9 December.

Intermediaries legislation - IR35

As you know the government announced at the Summer Budget that HMRC would engage with stakeholders over the summer about the best way to reform the intermediaries legislation (IR35). A discussion document was published on 17 July and HMRC received over 160 written responses in addition to 14 roundtables with stakeholders.

The government is considering responses to the discussion document. The government’s objective as set out in the discussion document is to find a solution that protects the Exchequer and improves fairness in the system without creating disproportionate burdens on business, or widening the scope of the rules.

So, in other words, we flew a kite, it was shot down by the UK Contractor Air Force, so now we are off to Toys R Us to buy another one, with a laser. See you in April...?

[dmini]

so does that mean "those caught by IR35 and using PSCs" or something wider?

[eek]

so does that mean "those caught by IR35 and using PSCs" or something wider?

For the T&S stuff yes just using a PSC and caught by IR35. Of course what today is outside IR35 may not be the case after the review of the Intermediaries legislation - IR35. But that's a battle for another day.

[TheFaQQer]

so does that mean "those caught by IR35 and using PSCs" or something wider?

And umbrella users as well.

So not good news for umbrella users or those inside IR35 who incur travel expenses.

[mudskipper]

And umbrella users as well.

So not good news for umbrella users or those inside IR35 who incur travel expenses.

But good news for the rest of us. At least for now

[LisaContractorUmbrella]

And umbrella users as well.

So not good news for umbrella users or those inside IR35 who incur travel expenses.

It all depends what 'outside' IR35 will eventually mean - SDC from the end client........

[jamesbrown]

It all depends what 'outside' IR35 will eventually mean - SDC from the end client........

Definitely. Also, this would tend to push some umbrella users to PSCs, chancing IR35 when they're really better off with an umbrella. So, I suspect something will happen on IR35 for April 2016 (i.e. an announcement of intent). Overall, I think this was a sensible move, because T&S based on SDC would've preempted the IR35 reforms to come, but I wouldn't expect any great changes in approach. It's a stay of execution, perhaps, but it doesn't change anything fundamentally. Much better than expected, but the worst is still to come.

[northernladuk]

Definitely. Also, this would tend to push some umbrella users to PSCs, chancing IR35 when they're really better off with an umbrella. So, I suspect something will happen on IR35 for April 2016 (i.e. an announcement of intent). Overall, I think this was a sensible move, because T&S based on SDC would've preempted the IR35 reforms to come, but I wouldn't expect any great changes in approach. It's a stay of execution, perhaps, but it doesn't change anything fundamentally. Much better than expected, but the worst is still to come.

Oh more newbies then!! Great

[Waldorf]

The removal of T&S effectively puts the final nail in the coffin for umbrella companies. Many brollies will of course start the process of trying to move their clients to PSC's. Many will, so they may salvage something, but most will go permie or via the agency.

Of course an umbrella guiding clients to go limited will contravene the MSC rules! Of course many brollies will at best ignore this or at worst be unaware of what MSC is [emoji33]

Lastly it is another case of government not thinking this through, they have a problem with too many contractors working through PSC's, so what do they to, encourage thousands of brolly users to go limited! They will then want to block this off in a few years, or even months.