Travel expenses consultation process launched

Posted on 23 July 2008

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A consultation process concerning the so-called "widespread abuse" of travel expenses by some umbrella companies and agencies has been launched by the government.

HM Treasury has launched a paper entitled Tax relief for travel expenses: temporary workers and overarching employment contracts.

The government will investigate the process by which overarching employment contracts can be used to enable some temporary workers to gain tax relief for travel expenses where other workers would not be entitled.

According to the paper, travel expense rules are being abused to allow some individuals to pay less income tax and make smaller national insurance contributions.

Workers who are in employment in a designated "temporary workplace" may currently make a reimbursement claim, whereas other temps may not.

According to the Professional Contractors Group (PCG), it is no surprise that the government has decided to act upon this issue.

Managing director John Brazier said some umbrella firms and other staffing providers had been "blatant" in advertising their use of expenses policies to minimise tax.

The government is welcoming comments on the issue up until October 13th 2008.

Category: Tax & Legislation News

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