After the announcement by HMRC on 16 December 2014, we have all been anticipating the changes that will affect a contractor’s ability to claim for travel and subsistence expenses. Time is now up to share your views on the potential changes in the consultation document, so now we will have to wait for the outcome.
If you have not yet read the consultation document ‘Temporary workers – relief for travel and subsistence expenses’, you can view this in full here.
As contractors will know there is a tax advantage of temporary workers being able to claim for subsistence and daily travel to and from work. HMRC are looking to remove this benefit to level the playing field with ordinary employees who simply have to pay for such expenses out of their after tax income.
Whilst the underlying aim for HMRC is to clamp down on the abuse of the system by Umbrella Companies, this could also impact on contractors who operate through a Limited Company as well as on the overall value of contracts. This could have a negative effect on the economy by discouraging those considering taking a leap in to contracting at a time when the nature of work and employment is changing and the skilled, flexible workforce is growing in importance.
It can be argued that the ability to claim travel expenses is justified as contractors don’t have the same benefits as employees in that they do not have job stability, payments can be delayed and they bear financial risks.
If you are a contractor operating through a Limited Company, now would be a good time to appoint a specialist contractor accountant. By using our slick and technology driven service you will benefit from your own dedicated accountant to provide you unlimited support to ensure that you comply with HMRC’s guidelines.
At Gorilla Accounting we have structured our contractor specialist service offering around both our own experience and feedback from contractors themselves. We have devised a superior accounting product sure to enhance the accounting experience of any contemporary contractor.
To join Gorilla Accounting today (specialist contractor accountants), and take advantage of our single, simple accounting package call 01204 357 105 and one of our friendly team will be more than happy to assist.