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As disclosed in the Chancellor’s Autumn Statement, the Government have drafted legislation changes that will see workers employed through umbrella companies no longer being eligible for tax relief (Income Tax and Employee National Insurance) on reimbursement of their travel and subsistence expenses.
The change is expected to affect up to 430,000 umbrella company workers.
Relief will be restricted where services are supplied under the supervision, direction or control of another person.
We have scoured the document in-house at Umbrella.co.uk and can only find the below statement that relates to contractors and travel and subsistence.
“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.”
An index measuring contractor confidence has dropped significantly in the third quarter of 2015, with government attitudes towards contracting the apparent root cause.
The Freelancer Confidence Index which is conducted by The Association of Independent Professionals and the Self Employed (IPSE) has recorded a significant decline in the latter parts of 2015.
The index score measuring contractor’s business prospects has dropped negative for the first time ever.
The Freelancer and Contractor Services Association (FCSA) has accused the government of valuing councillors over contractors, calling hypocrisy on government plans to provide travel-to-work tax relief to local councillors at the same time as talking of scrapping them for temporary workers.
At a time when the review into contractor travel and subsistence (T&S) tax-relief is ongoing, it has emerged that MPs want to award councillors a similar package of tax savings on their travel.
The government changes will exempt councillor travel expenses from income tax and National Insurance. This applies to journeys made between the councillor’s home and permanent workplace.
Umbrella.co.uk staff got into the ‘spirit’ of Halloween today fundraising in aid of East Cheshire Hospice. Staff dressed up in their scariest costumes, sold spooky themed cakes, played Tombs of Doom and held a fancy dress and creepiest desk design competition.
Neil Armitage, Operations Director, said: “We are very proud of the commitment to fundraising shown by our employees. Their enthusiasm, creativity and generosity never fails to amaze me. There’s always something fun going on at umbrella.co.uk”.
We'll be doing our bit in a Christmas knit for Text Santa Christmas Jumper Day!
On Friday 18th December, we'll be wearing our Christmas jumpers with pride, and making our woollies worthy by donating to the cause to help families in difficulty.
We love Christmas and can't wait for the 18th, so we're warming up and going all out with festive knits every Friday throughout December!
Some happy reminders from last year!
The Chancellor, George Osborne will deliver his 2015 Autumn Statement today Wednesday, November 25th at 12.30pm.
Along with the detail of the spending review, the Autumn Statement is rumoured to include various changes that may affect contractors and freelancers working in the UK. He is, in particular, rumoured to be targeting tax relief on travel and subsistence expenses as well as those contractors who work through their own limited company.
We will be providing regular updates throughout the speech and on reviewing the full detail of the Autumn Statement once published, which is expected in early December.
We will also be monitoring the responses in the coming days and what these changes will mean.
If you are a contractor or freelancer the most tax efficient way for you to work is often through your own limited company. This allows you to benefit from the incentives offered for setting-up and running your own business and hence allows you to maximise your earnings after tax.
It also enables you to develop and build your business & brand and potentially in the future employ others.
The downside of this is that there is more responsibility on you as a director of your own limited company and there are statutory requirements re maintaining financial records, preparing and submitting year-end accounts, corporation tax returns, personal tax returns, payroll and managing invoicing & payments.
Umbrella.co.uk's spooky fun raised over £300.00 for East Cheshire Hospice. Staff made such a tremendous effort dressing up and baking cakes, the Directors have generously doubled the fundraising total!
East Cheshire Hospice is a haven of care and calm for people facing challenges at the end of their lives who live in the communities of Buxton, Congleton, High Legh, High Peak, Knutsford, Macclesfield, Poynton, Wilmslow and the villages and hamlets in between.
New research has found that proposed changes to contractors' travel and subsistence allowances could cost them up to 20 per cent of their annual revenue.
In July of last year the government launched a review into expenses and benefits for contractors. On 23 September 2014 they published a discussion paper outlining their case for changing the current rules on tax relief.
The government believes that travel and subsistence expenses, like travel between workplaces and the cost of a meal at a temporary workplace, are over generous and outdated.
