Much of the noise in recent months has been around the Finance Bill 2016 and the introduction of the SDC test for Umbrella workers which determines whether Travel and Subsistence expenses are claimable by workers. It is quite right that so much has been made of this legislation as it represents the biggest change to the marketplace since April 2014 which brought the same test to ‘self-employed’ operatives.
However it is important to also remember Finance Bill 2015 which impacts on how expenses can be processed and paid from April 2016 onwards.
In essence Finance Bill 2016 will determine what expenses are claimable / allowable in summary as follows;
If there is SDC then Travel and Subsistence expenses cannot be considered, other claims such as travel in between a temporary site or a necessary training course would remain as an allowable expense.
If there is no SDC then Travel and Subsistence expenses can be considered alongside other necessarily incurred expenses.
Finance Bill 2015 (S289A ITEPA) then states how the allowable expenses can be processed and paid;
Mileage (home to work or travel in between a temporary site) can be paid on a weekly basis providing Tax and NI relief at source. All other expenses have to be claimed via a Self-Assessment or P87 thereby providing Tax relief only at the end of the tax year.
In light of the above it’s no wonder contractors are assessing their options, including self-employment or PSC where appropriate.
If you want any advice or assistance at this time please call us on 01244 500195.
