BOOK A FREE CONSULTATION

What is travel and subsistence?

The cost that is incurred during your official or business travel and also includes accommodation and food during the time is travel and subsistence costs. Subsistence is in the category of business-related travel for its association with the same.

Changes to Travel and Subsistence Expenses

Who are Affected by Changes to Travel and Subsistence Expenses?

The Government announced new legislation on April 6, 2016, in which workers are levied restrictions on their ability to work for tax relief on their travel and subsistence expenses unless it is clear that worker is not within the direction, supervision or control (SDC) of either the agency, the client or us based on the process they do their work.

All agencies and umbrella workers are affected by this new legislation. Workers working through personal services companies (PSCs) if fall outside IR35 don’t get affected. It has been declared by HMRC that it will believe all umbrella workers and agencies are answerable to SDC till the time both has enough proofs that are contrary to their belief.

Therefore, even though umbrella companies and agencies have got enough of proofs to show to HMRC that SDC is not there, it will be very much easier for some of the umbrella workers to claim their travel expenses at their temporary places.

Changes to Travel and Subsistence Expenses

We will help you understand travel and subsistence in detail and also what the changes are about and how can they affect contractors.

Travel and Subsistence Changes: According to HMRC

Supervision

Supervision means some supervising some other person’s work to make sure that the work is done according to the set standards.

Direction

In direction somebody has to work under proper guidance, instructions, advice and direction of some person.

Control

In control, someone has the authority to tell the workers how they can do their work. In this the controller has the right to shift workers from one task to another.

SDC and Important considerations

SDC over where the work is done, what is to be done and when it is to be done does not conclude that legislation will necessarily nab your contractors. The essential matter here is whether SDC is applicable over HOW the work is done.

HMRC will check below points to determine where the SDC applies:
  1. The engagement terms, means what is agree on the contract.
  2. How the work is done or is essentially done.

How We Can Help With Travel And Subsistence Expenses?

We have an army of highly qualified professionals to assist you throughout the process. If you have doubts or unable to grasp the entire process you can reach out to us for immediate assistance.

Share this post


Sign up to our newsletter

Tax news for contractors freelancers and small businesses.