Temporary workers draft legislation and guidance published

Under proposed changes to taxation laws in the UK, from 6th April 2016 certain temporary workers will no longer be able to claim relief for travel and subsistence expenses.

The current tax relief and disregard for National Insurance contributions (NIC) on travel and subsistence expenses rules allow for expenses claims incurred by these workers on their commute.

New restrictions

The newly published guidelines reveal that restrictions will apply to workers who are employed through an employment intermediary, which includes those who use an umbrella company.

Temporary workers who are employed by a recruitment agency or other employment businesses will also be affected.

Finance Bill 2016

The draft Finance Bill 2016 legislation, along with draft explanatory notes and guidance, has been published and feedback has been invited, with a closing date of 3rd February.

The consultation revolves around whether the new legislation will implement the new policy as intended, rather than as a consultation on the actual policy itself.

The aim of the new policy is to align the tax and NIC treatment of travel and subsistence expenses across the spectrum of temporary workers and contractors.

Workers who are not under supervision, direction, or control in their day-to-day work will be treated in the same way as the self-employed, and will be able to continue to claim relief as they do at the moment.