Marking the beginning of another section in the govt’s review of the agency sector, a new consultation entitled ‘tax relief for expense travel: temporary employees and over-arching contracts’ has been issued.
It is widely believed that the principle reason behind this new consultation is to eradicate the ability of agency employees to say tax relief against their expense travel while operating through an umbrella company or organization; using an over-arching employment contract.
Claiming Tax Relief Against Expense Travel
The principle of claiming tax relief against expense travel has said to possess been abused by both agencies and umbrella firms with the consequence that the exchequer has lost money. This, after all, brings us back to the compliance discussion relating to the fact that there’s still a lot of confusion among agencies and non-compliant umbrella’s about the MSc legislation.
This new consultation comes at a time when there is sufficient uncertainty among the company sector following the announcements in might concerning the extension of rights to agency workers. Umbrella firms supply companies a significant advantage if they are operated compliantly. The Govt. expects the non-compliant activities of some umbrellas to influence the market still – hence the need to further regulate.
The govt. Has, but, indicated that there’s a need to balance any restrictions of the relief since its removal could terribly well injury the pliability of the workforce. The consultation will also consider whether there are more unfair blessings arising from the use of overarching employment contracts within the agency sector.
Umbrella firms welcome any try to make sure compliance throughout the umbrella and agency marketplace and that following on from the Acme’s initial meeting with HMRC and Treasury, they fully expect to be able to assist with the consultation process.
Responses to the consultation are due by the thirteenth October 2008, and at that point, this issue ought to be addressed rigorously in the context of different government measures that are already in place like the MSc legislation and therefore the proposed agency employee’s directive.
It should be noted that this can be solely consultation and not proposed legislation.