On Thursday, as part of the Autumn Statement, the Chancellor released further details of his plans to restrict the travel and subsistence expenses that can be claimed by contractors working through an employment intermediary.
These restrictions are expected to affect the expenses that can be claimed by many people working through an umbrella company OR their own limited company (known as a PSC). The exception to these changes will be if you are working for your own PSC and the work is OUTSIDE IR35 as tested by the Direction, Supervision and Control conditions.
To put it simply, there will be restrictions on the travel and subsistence expenses you can claim from April 2016, UNLESS you are working for your own PSC and you are NOT under the direction, supervision and control of anyone in carrying out the duties of your contract.
The exact nature of these restrictions will be made clear in the actual draft legislation to be released on 9th December. It should also be remembered that IR35 itself is currently under review.
The main thing to consider at the moment is: DON’T PANIC! None of these changes can possibly take effect until April 2016. Before anyone can decide which is the best way to manage their business affairs they need the full information of the conditions which will apply. Our advice is not to run off and form a new PSC, change your umbrella company or plan to give up contracting altogether. We have heard of some companies offering new “solutions” to tempt contractors into jumping ship. This is the equivalent of knocking your house down and putting up a tent because you have heard that an earthquake might be on the way.
When we have the full details of the conditions which will apply from April 2016, which will not be before the 9th December, we will be able to advise you of the best way forward given your own personal circumstances.
If you have any concerns or for just an informal conversation do not hesitate to contact us by phone or email, alternatively follow us on Facebook, Twitter or Linkedin where we regularly post news updates, along with this blog.
Best Regards
All at TUS.