Finance Bill April 2016

Finance Bill April 2016

Ahead of the changes set to be made in the new finance bill we wanted to explain how it could affect our clients and our temporary workers.

From 1st April 2016 the Government and HMRC are changing the way they treat travel and subsistence claimed by temporary workers. The result will be, without further action being taken, many workers taking home less net pay each week. Here at Advantage we have never used an umbrella company so your take home pay will not be affected, there will be no effect on tour clients.

What are the changes?

As per the Finance Bill 2014 Agency legislation on false self-employment, any worker that comes under SDC should be taxed as PAYE.

Agency workers that are being paid via a PAYE Umbrella model at the moment are currently able to offset their home to work travel & subsistence expenses against gross income, increasing their take home pay.

In this latest budget, from April 2016 for those same workers, the HMRC are removing the ability to offset travel and subsistence expenses to claim tax relief.

Depending on the workers use of this relief and the payroll model currently used, the changes may have a significant impact.

What is SDC?

If anyone in the contractual chain Supervises a worker, Directs on how to undertake a task, or Controls their working hours or locations (or has the right to), other than for health, safety or security purposes the worker should be taxed as PAYE.

What is the solution?

You may have had other agencies getting in touch, telling you horror stories, and offering all sorts of weird and wonderful solutions , don’t worry by being employed by Advantage there won’t be any changes to your weekly pay, you are protected from the current changes.

Be warned!

Many of these so-called solutions are not be compliant, and will often leave the client (and not the agency) in HMRC’s firing line.

We are aware of many agencies offering schemes to workers that are too good to be true, they are not compliant. HMRC have already stated they will attack any model they deem to be tax avoiding non-compliant.

If you need to know more Telephone 01274 590066