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Latest Article: Umbrella companies restriction of tax relief on expenses
Posted by: Imber on Apr 16, 2015

The removal of tax relief on travel & subsistence expenses for umbrella companies’ contractors had everyone alarmed last week.

The Freelancer and Contractor Services Association’s (FCSA) chief executive Julia Kermode is relieved, explaining that: “We were worried that the rules would simply be changed and we are very pleased that HMRC and HM Treasury have listened to our lobbying, and appreciate the value of our sector.”

The Chancellor explicitly said that the measures would be designed to shelter the genuinely self-employed and tackle third parties that abuse the system for their own benefits.

“FCSA members and their contractor clients don’t abuse the current system, so I am not convinced that they need worry about these measures. I have already spoken informally to HMRC, and a spokesperson said that they are looking to end tax relief for workers supplied by intermediaries who are effectively working as an employee. This does not include genuine contractors and freelancers.

“The use of supervision, direction and control neatly ties in with the False Self-Employment legislation. According to HMRC, we are unlikely to see any movement on this initiative until after the election.”

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