Travel Expenses Tax Crackdown

Travel Expenses Tax Crackdown

The government is set to crack down on the abuse of tax relief for travel expenses by temporary workers.  The treasury said umbrella companies and some employment agencies made use of overarching employment contracts, which enabled some temporary workers to gain tax relief for travel expenses not available to others working in similar circumstances.  It said there was also evidence of “widespread abuse” of the travel expenses rules by these structures.

The government warned that non-compliance and the use of these structures to pay less income tax and NI contributions led to a loss of tax revenue.  The Treasury said the consultation sought to expand and test the government’s analysis of overarching employment contracts in terms of the size of the sector, their role within the wider labour market and the extent of the problems arising from the use of these structures.  The consultation is open until 13 October.

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