The pre budget report contained the welcome news that the government has
decided not to change the tax reliefs on travel expenses, but that is
not the end of the matter.
Adrian Marlowe, managing director of Lawspeed, said “this news will
come as a huge relief not only to umbrella companies, but also to the
large number of contractors for whom tax relief is a significant factor
in accepting site based work. However this will not be the end of the
matter as I am informed that the government will now set up a task force
with greater emphasis on compliance and dispensations”.
went on to say “we are very grateful for the tremendous support that
was provided for the representation. It goes to show the value in
providing a cohesive and coordinated strategy, and I hope that this
continues. However, it is entirely possible that economic factors played
a part in the government’s decision, and there is much more work to be
done to help provide a level playing field and a suitable compliance
structure that will be acceptable to HMRC. We look forward to working
further with our clients, particularly the AEMC which has been set up
specifically for that purpose, in order to achieve a good long term
Lawspeed had represented many umbrellas, other companies
and also the trade organisation the Association of Employment
Management Companies (“AEMC”) in the recent expenses consultation.
AEMC also welcomed the decision. Adrian Learer, of Plan IT services and
a director of the AEMC commented “the AEMC campaigned for precisely
this result, but I urge that there should be no complacency. The reasons
for the consultation in the first place should not be forgotten and a
return to practices that the government clearly finds unacceptable could
be disastrous for everyone in the industry in the long run.”
AEMC now intends to further address government aims. Top of the list
will be the issue of dispensations, which are understood to be a key
area of concern for both government and umbrella companies.
is a link between compliance and the Managed Service Company (MSC)
legislation introduced last year. Agencies should still be concerned to
ensure that the service providers they use are not exposing them to risk
of 3rd party tax debt transfer. HMRC has already set up investigation
units and is actively investigating some operators.
offers advice services to any service provider in this area to help
achieve compliance and to any agency interested in identifying compliant
providers. For more information call Adrian Marlowe, Ravi Murphy or
Theresa Mimnagh on 01273 236236, or email to firstname.lastname@example.org quoting
reference “umbrella and agency services”..
AEMC is open to application to any umbrella company that employs its
workforce. Benefits of membership include overcoming agency concerns
about compliance and application of the Managed Service Company
legislation. For more information see www.a-emc.co.uk or call 0845 1295119. Adrian Marlowe is also a director of the AEMC.
For the original consultation document see link here.