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Contracting Blog

Contractors Reaction to the UK’s Restriction on Travel and Subsistence Relief

27/04/2016

In response to the government’s announcement of the restriction on tax relief for travel and subsistence expenses, an alarmingly large amount of contractors have let their feelings be known on the matter via surveys.
The huge consensus is that these measures are indeed going to impact contractors negatively from a financial standpoint despite government assurances that this will not have any significant economic impact.
Most contractors have indicated that these measures will cause them to reject job offers if there is a significant amount of travel involved unless their losses for this are accommodated into their contract.  Therefore this measure is not only affecting contractors, but will also result in losses for the end client.  Other contractors have indicated that they are more likely to take job offers from abroad due to what they see as persecutory treatment from the government in the UK.  This opinion with regards to the government has not been helped since government plans to introduce a brand new relief in order to enable local Councillors to get tax reductions on their home to work travel expenses has been revealed.
Restriction to tax relief on travel and subsistence expenses is also dependent on the employment status of the contractor and this has sparked speculation leading to criticism of the current assessment plans that it is open to false self-assessment which is likely to cause a huge burden on the HMRC.
If you are concerned as to the impact of these restrictions with regards to your contract work, please do not hesitate to contact us.
 



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