HMRC looking to curb travel expenses for self employed?
Discussion
I have just received an email from my accountant which indicates that HMRC are looking to put curbs on tax deductible travel expenses and subsistence allowance for self employed and freelance workers.
Whilst they say this won't affect sole traders and people running their own limited company to start with (it's initially aimed at people working under umbrella companies) - they do fear that will be the next logical step.
Anyone else heard of this?
Whilst they say this won't affect sole traders and people running their own limited company to start with (it's initially aimed at people working under umbrella companies) - they do fear that will be the next logical step.
Anyone else heard of this?
I think it was in the Chancellor's Autumn Statement that they were looking into it but I hadn't seen any concrete plans.
ETA: Having seen Livingthedream's post I've checked the 2015 Budget.
ETA: Having seen Livingthedream's post I've checked the 2015 Budget.
2015 Budget said:
Umbrella companies and employment intermediaries
1.250 Autumn Statement 2014 announced that the government would review the growing use of overarching contracts of employment that allow some temporary workers and their employers to benefit from tax relief for home-to-work travel expenses, relief not generally available to other workers. This is unfair. As a result of the review, the government will change the rules to restrict travel and subsistence relief for workers engaged through an employment intermediary, such as an umbrella company or a personal service company, and under the supervision, direction and control of the end-user. This will take effect from April 2016 following a consultation on the detail of the changes. It will level the playing field between employment businesses that seek to lower their costs by using these arrangements and those that do not.
1.250 Autumn Statement 2014 announced that the government would review the growing use of overarching contracts of employment that allow some temporary workers and their employers to benefit from tax relief for home-to-work travel expenses, relief not generally available to other workers. This is unfair. As a result of the review, the government will change the rules to restrict travel and subsistence relief for workers engaged through an employment intermediary, such as an umbrella company or a personal service company, and under the supervision, direction and control of the end-user. This will take effect from April 2016 following a consultation on the detail of the changes. It will level the playing field between employment businesses that seek to lower their costs by using these arrangements and those that do not.
Edited by ralphrj on Tuesday 28th April 11:25
Moonhawk said:
^^ yep that's the one.
Re: the point you raised earlier.I think that you'll have to wait until the consultation is complete to see what impact it will have. I suspect that 'irregular' travel expenses and subsistence will still be allowed but the current rules that allow you to claim travel expenses travelling to the same place every day as long as it doesn't go over 2 years will end.
Esseesse said:
It never occurs to a government to make the travel expenses 'fair' they could just allow relief on all travel related to going to work. In fact, shouldn't this be the preferred option for a right leaning government (they're not)?
Why?If everyone claimed home-to-work travel expenses how many more people would HMRC have to employ to audit the figures/process the tax rebates?
DeanR32 said:
Last week, I travelled to brighton mon/tues, weds/thurs in Blackfriars, London, and Bromley Friday, all from Southend on Sea. That equates to a bit over 500 miles.
That'll be a kick in the teeth come April time!
You should be fine with that sort of travelling pattern (I hope). I suspect what they are trying to stop is people claiming travel to a 'regular' place of work. At worst, you'd have to pick the place you travel to most and stop claiming for that one. That'll be a kick in the teeth come April time!
No change to legislation required - just proper application of the rules. It probably stems from the recent tax case, Samadian V HMRC -
http://www.law.ox.ac.uk/themes/tax/documents/29.07...
http://www.law.ox.ac.uk/themes/tax/documents/29.07...
Dr Jekyll said:
So if I get a 6 month contract at a site 200 miles away, it's no longer worthwhile because of the non deductible travel expense, so I'll sit at home paying no tax at all.
The animosity by HMRC towards anyone who could be vaguely described as self employed is verging on the unhinged.
Depends if that's your only client? The animosity by HMRC towards anyone who could be vaguely described as self employed is verging on the unhinged.
If it is, I'm not convinced you're actually running a business. Neither, as it seems, is HMRC. Hence the change in the rules.
menousername said:
oyster said:
Depends if that's your only client?
If it is, I'm not convinced you're actually running a business. Neither, as it seems, is HMRC. Hence the change in the rules.
what he is running then?If it is, I'm not convinced you're actually running a business. Neither, as it seems, is HMRC. Hence the change in the rules.
Nothing wrong about that of course, but at least be grown up enough to accept that tax rules can and do change.
oyster said:
A tax avoidance vehicle to operate as a temporary worker. Being a Ltd company one-man band doesn't make you a business. I know, I've done it before.
Nothing wrong about that of course, but at least be grown up enough to accept that tax rules can and do change.
or a ltd company focusing 100% efforts on one client for 6 months before moving on to the next... taking any gaps in income on the chin and still paying considerable amounts of income tax, VAT and Corp Tax, which is not "employment"Nothing wrong about that of course, but at least be grown up enough to accept that tax rules can and do change.
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