In the Summer Budget the Chancellor announced a review of the deduction for tax of travel and subsistence for employees working at temporary workplaces.
If the Chancellor had gone ahead and stopped this expense being deductible for tax this would have had a huge effect on contractors as their businesses are based at home but the director/employee will work all over the country.
It has now been confirmed that the Government will legislate to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company. Following consultation, relief will be restricted for individuals working through personal service companies where the intermediaries legislation applies (IR35). This change will take effect from 6 April 2016.
This is good news for all contractors.
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