SJD Accountancy

Travel and subsistence expenses still confusing contractors

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When the new rules governing travel and subsistence expenses for contractors were introduced two months ago, the response from those who were most likely to be affected was overwhelmingly negative.

Many were concerned that this would make contracting a less appealing option, in a climate where the UK economy relies on the flexible workforce in order to thrive. Industry bodies, finance experts and contractors themselves asked the government to reconsider, and failing that to provide detailed information about how and when the rules would be applied.

It appears that concerns about the rules governing the application of the new rules were not unfounded as a recruitment law firm have revealed that they are still receiving numerous queries from agencies about how the rules should be applied.

This demonstrates that the lack of clarity that concerned contractors and agencies alike, before the regulations were changed, is still causing problems which are requiring specialist advice to resolve.

One of the issues that the agents are trying to resolve is the ongoing confusion of ‘Supervision, Direction and Control’, the three factors which determine the status of an independent professional.

As long as agents are being told that there is no reason for them to avoid helping contractors to obtain evidence from the end-client about their SDC status, they risk being drawn into the situation to the extent that they could be implicated in any subsequent investigation.

This could be true whether or not any statement given by the hirer is correct, and in cases where it is incorrect the hirer is likely to be targeted by HM Revenue and Customs, which is almost certainly going to have a negative impact on their relationship with the agency as well.

Given that HMRC have said that they will not accept ‘simplistic’ waivers or generic statements, it appears unlikely that anyone working for the hirer will be able to understand the SDC test enough to prove that there is no SDC, suggesting that there may not be much mileage in involving hirers.

Contractors who want to learn more about how to record their outgoings can use our guide to contractors’ expenses to keep their finances in order. Those who want a better understanding of the legislation involved will benefit from our guide to IR35 and use our contractor calculator to work out how much you could be earning.

If you want to take the stress out of managing your finances and out an expert in charge of saving you time and money, then our team can help. Call today on 01442 275789 or email newbusiness@sjdaccountancy.com to learn more.

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