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Travel & Subsistence – Claiming Expenses

Claiming Expenses

In April 2016 the Government changed the Travel & Subsistence expense rules for agency and umbrella workers. The change has restricted a worker’s ability to get tax relief on their travel and subsistence costs unless it can be shown that the worker is not under the supervision, direction or control (SDC) of the client, agency or Focused in the way he/she carries out work.

HMRC has stated that it will assume that all agency and umbrella workers are subject to SDC unless the agency or umbrella company has gathered evidence to the contrary.

Using HMRC’s current guidance:

In April 2016, government changed some rules around travel & subsistence expenses which affected agency and umbrella employees. One such change meant that workers subject to supervision, direction or control (“SDC”) as to the manner of their work, could no longer treat their place of work as a temporary workplace. This had a huge impact on our industry, since the vast majority of workers are subject to some element of SDC. Nonetheless, for those subject to SDC, he/she can no longer have mileage or subsistence expenses reimbursed in relation to such assignments.

Using HMRC’s current guidance:

HMRC says Supervision

Is someone overseeing a person doing work, to ensure that person is doing the work they are required to do and it is being done correctly to the required standard. Supervision can also involve helping the person, where appropriate, in order to develop their skills and knowledge.
Focused Note: a client checking, at the end of the job, that is it has been carried our properly will not, on its own, amount to supervision.

HMRC says Direction

Is someone making a person do his/her work in a certain way by providing them with instructions, guidance or advice as to how the work must be done. Someone providing direction will often coordinate how the work is done, as it is being undertaken.
Focused Note: if you have an expertise that the client does not it is unlikely that the client will be able to direct you as to how to do your job.

HMRC says Control

Is someone dictating what work a person does and how they go about doing that work. Control also includes someone having the power to move the person from one job to another.
Focused Note: if you are filling in for a full time employee who is sick or on leave it is likely that you will be subject to SDC.

HMRC will look at documentary evidence, including the terms of engagement, and the way the work is or has actually been done. This will include gathering evidence from enquiries with any person involved in the arrangements including the worker, client and agency.

If you’re an existing contractor with Focused would like to discuss your current role or a new assignment, you can call or email our support team on 0161 923 0210 or and they will be able to advise on which route is best for you.