How the Finance Bill 2016 affects your Umbrella Registered Contractors

Posted: 19th April 2016

As you may be aware, at the beginning of April this year the Finance Bill 2016 came into force which directly affects all temporary workers and the tax relief they can claim on home-to-work travel or subsistence expenses.

The vast majority of temporary workers will no longer be eligible for tax relief on travel and subsistence if they are caught by the supervision, direction or control test as set by HMRC.  There are some exceptions; site-to-site relief may still apply to certain contractors such as care workers, midwives, web developers and carpenters.

Many of the umbrella companies used the benefit of tax relief on travel and subsistence as part of the package they provided to contractors. These umbrellas have now had to find an alternative way to continue to provide an umbrella payroll service to your temporary workers.

Some of the larger umbrella companies prepared for the new legislation by offering alternative schemes for the workers and will be migrating these workers onto the new umbrella schemes throughout April.

It is really important for you as an agency to have an open dialogue with the umbrella companies your workers are registered with to understand what their plans are with any changes to legislation and how this will affect your umbrella workers.

We are always on hand to help our clients and if you wish to discuss any of the points above, please contact Lisa Barford on 01908 268882.