Blog: George Osborne to review contractors expenses & Umbrella companies
December 8, 2014
The chancellor has announced the government will review the use of umbrella companies as part of its efforts to crackdown on tax avoidance.
The Autumn Statement saw news that the government is “concerned” about the use of travel rules by umbrella companies. Umbrella companies argue that each contract is temporary, and so their clients can get tax relief on all their reimbursed travel costs.
The government is now to launch a consultation on the use of travel rules by umbrella companies, which will “inform potential future action”.
Nicky Owen founder of Carrington Umbrella added “The Government had already stated in their March Budget (albeit in the small print) that they intended to look more closely at both travel and subsistence claims made by temporary contractors. We expect them to enter a period of consultation before announcing any formal revision to the current rules and we will be keeping a close eye on developments.”
The Autumn Statement anticipates that this will increase the Treasury’s tax take by £120m in 2016-17, so any changes are likely to take effect from April next year.
If you’d like further information on the latest legislation for contractors please contact one of our experts on 0203 713 4530 or email email@example.com