From 6th April 2016 HMRC will assume that, if you provide your services through an agency, umbrella company or your own limited company, you are subject to supervision, direction or control, (SDC), or the right of SDC and:
- Each engagement will be treated as a separate employment,
- Each workplace will be regarded as a “permanent” workplace,
- Travel from home to each workplace is regarded as normal commuting and any travel costs do not attract tax relief.
HMRC will, understandably, target non-compliance with this new legislation and we owe it to you to ensure that further down the road you are not facing a bill for unpaid tax, interest and penalties because we failed to give you a fully compliant service. Since the Budget announcement we have had exchanges with senior HMRC staff to ensure that we go forward strictly in accordance with the new legislation and these are the changes that we are bringing into effect.
From 6th April 2016 we will no longer process non-chargeable expenses.
If you incur non-chargeable expenses which you consider attract tax relief you will have to claim the relief by sending a form P87, (https://www.gov.uk/government/publications/income-tax-tax-relief-for-expenses-of-employment-p87), or a Self Assessment Tax Return to HMRC after the end of the financial year.
If your allowable expenses are substantial and you consider it will cause hardship if you have to wait more than a year for the tax relief you should ask HMRC to include a reasonable estimate of your annual allowable expenses in your Tax Code.