Contractors, have your say on expenses tax relief ban

Responses to the proposal in Budget 2015 to ban tax relief on expenses for supervised, directed and controlled workers are needed from contractors, not anybody else, says an industry body.

All Umbrella Companies Are Equal (AUCAE) says it wants to hear from contractors in an umbrella or limited company who might be affected by the proposal, so it can send their views to HMRC.

The viewpoints and comments sent to the tax authority will be anonymised, and submitted as part of AUCAE’s own response to the proposal, which will take effect from April next year.

In fact, from 06.04.16, contractors in a limited or umbrella company who are directed, supervised and controlled by their client, will get no tax relief on travel and subsistence costs.

HMRC claim that by withdrawing tax relief on travel and subsistence expenses for umbrella and PSC contractors ‘who broadly look like an employee’, they will raise £635million over four years.

Yesterday, AUCAE said that “many umbrella companies” have had meetings to  draw up “written responses” to HMRC on the impact of the legislative changes. But it added:

“We’ve noticed that although the industry has been quick to respond, there appears to be no representation from contractors themselves, and we would really like to add their perspective.

“We want the contractors' voices to be heard so that the government and HMRC gain a full understanding of the sector and the integral role that contractors' play in [it].”

To have your say as a contractor on how tax relief on travel and subsistence expenses ending may affect you, fill in the form on AUCAE’s website.