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Contractor T&S Survey Responses
Budget 2015: Changes to legislation affecting T&S (Travel and Subsistence) Expenses for contractors working through Umbrella Companies and PSC's.
We want the contractors' voices to be heard so that the Government and HMRC gain a full understanding of the sector and the integral role that contractors play in keeping the economy moving in the right direction.
So what do the contractors think so far? Let's take a look at some of the responses to date...
If the T&S expenses were withdrawn it would lead me to not look for contracts which are based in a separate part of the country from where I live. The expense of having to stay away from home but receive no tax relief on those expenses would be too much income to lose. This can't be good for either myself or for the end clients who may be desperate to get the experience that contractors provide with their services.
I am currently contracted for a government department who can not get enough technical resources locally. So 70% of the technical personnel are from a minimum of 50 miles away. Permanent employees get their expenses including hotel bills paid directly from the government. Contractors have to pay their own expenses from their rate. If this law comes into being then government departments and other public sector bodies will have insufficient technical resources as people will not commute daily or weekly.
I travel all over the country to take up contracts, despite the fact that I live in Cheshire. I cannot move because both my wife and daughter have ME and that kind of upheaval would be disastrous to their health. I spent 15 months working for a client in Scotland. That client could not source the people locally to meet their contractual obligations with their client. They therefore had to identify contractors from all over the UK to fill the gap. With a 500 mile round trip, meals and accommodation, most contractors, myself included, would not be able to fill these roles as the costs and taxes would be uneconomical.
Restriction on the ability to obtain tax relief on travel, secondary accommodation and subsistence are going to have a crippling effect on my earnings obtained from working as a locum for the NHS. Not being able to reduce my costs associated with working all over the UK for different NHS trusts during the financial year will make my availability for work greatly reduced, as I will be forced to cut down on my travel expenses meaning that I will only be able to work locally to my current home.
This is simply crazy legislation. It means that many contractors will not accept assignments where overnight accommodation or long commutes are concerned, as pay will be seriously eroded. This, in turn, will seriously stifle the UK economy which desperately needs to re-invest in large IT programmes after many tears of under-investment during the recent financial crisis. All UK areas North of London will be disproportionately adversely affected, as the pool of expertise is more geographically-remote from where most of the work is centred.
My end client requires me to make occasional trips to locations in the UK and abroad. If I lose tax relief on expenses incurred, this could leave me out-of-pocket by multiple thousands of pounds.
People should only claim tax relief for travel costs when they travel for work; i.e. from their real place of work to their temporary workplace (e.g. visiting a factory site away from their main place of work). The legislation in this area was to my mind always quite clear and had been the same in spirit for many, many years - if employees, temp or perm, travel to another site temporarily for work away from their main place of work (i.e. where they really work ordinarily every day) they can claim for the costs if their employer doesn't repay them that cost. Any other arrangements where temps claimed for travel beyond this (for example somehow claiming the cost to go to work every day) would have been artificial to my mind and if the government is cracking down on that kind of abuse then I am in agreement with the government.
I write to express my grave concern the effect the changes to travel and subsistence allowances announced in Budget 2015 will have on the Service industries. I believe the initial effect will be twofold.
I'm unsure if I understand the budget changes properly, but if it means that I would lose the right to claim tax relief on what is in effect a direct cost that should not involve tax at all then it seems extremely unfair.
My Umbrella company invoices about £7,500 per month for my services (incl VAT at 20%, another DIRECT tax on my efforts). After take-offs (Employer's NI, Employer's NI and Income tax and my travelling and subsistence expenses) I net about £3200, LESS THAN HALF of the gross. The Government's take is more than I net. If travel and subsistence came out after tax and NI, my net would be down to about £2200, i.e. not worth the effort of travelling and staying far from home on top of working long and often stressful hours,
I think you could have explained what the changes mean rather than ask us to look for a needle in a haystack. I am happy the the government is trying to tackle abuses and I am happy that Contractor Umbrella always tries to work within the regulations. I can understand that people in low earning professions might be affected unfairly if their job involves a lot of expense but from the details you give I cannot tell. No one in IT should whinge.
I feel under attack. I am operating through an umbrella company paying PAYE, living away from home through the week and earning around 40k annually. I took a contract to get out of unemployment. I am now facing the prospect of being poorer.
It is clear both Labour and Conservatives are out to get those who take the risk to work on contract basis, there is an unrelenting cycle of tightening of tax restrictions against the very people the government should be nurturing.
Temporary work is often taken at locations long distances from home. A contractor takes on this work as they are aware that it is for a finite period of time. They would not choose this as a permanent job given the travel involved and would either find work closer to home or move closer to the Location. 24 months is a reasonable period to assume that the location is now 'permanent' and it is unfair to remove tax relief up to this period. Highly skilled temporary contractors fill vital roles for companies and public bodies, managing and implementing improvement projects which, by definition, are for short durations. This is beneficial to the company (no need to hire permanent staff) and the contractor (flexible life style). Removing tax relief for travel would, in my opinion, affect the willingness of temporary workers to travel outside their home area, thus depleting the skill pool available to businesses looking for temporary contract staff to work on high profile and vital business improvement projects.
The proposed changes will decrease the appeal of being a temporary worker.As a result more people will reject temp work, and thus leave the UK with a skills shortage that will put us behind most of Europe and if not the Globe.
I have looked into this and I think it would be an extremely bad idea. Umbrella companies help out HMRC and the government out a lot.
I am a senior programme manager, specialising in ensuring that the desired benefits from any programme are effectively realised (Benefits Realisation).I am currently helping with the major work at Sellafield, Cumbria associated with ‘cleaning-up’ what has been internationally recognised as an ‘intolerable risk’. Sellafield probably has the greatest concentration number of contractors associated with it, within the UK.
The umbrella company i work with have helped me alot and being employed is a great help, the expenses make my work more viable and i would probably not take many roles if my current situation had to change.
I have worked with a number of umbrella companies in my three years of contracting, all of which have been incredible helpful with a number of issues.
ill be well out of pocket. travel 180 miles to site every week and then pay for digs. ill not be able to afford to do that anymore.
Many contractors feel that if these changes are implemented then many like me will be unable to take roles further afield .
I need to be able to claim back my expenses. This is even more important now due to the fact that i now pay two lots of National Insurance compared most people paying it just once. That means I am already paying double national insurance because I am a supply teacher and not a permanent member of school staff on payroll. It seems that everything is being taken off me. All the subsistence expense does is patch up the short fall in the extra NI I have to pay. Why am I being penalised for being a contractor?
As zero-hour contracts are sometimes forced on us by employers who often prefer them to permanent contracts despite the fact it negatively affects the long-term effectiveness of their enterprises, the Government should not tax us more by changing the T&S rules. Thanks!
It won't affect me at all. Umbrella organisations take the same money from my pay as the government would and ask for more of my time. I want to pay tax and had already moved from such an organisation when the news was announced. I am more shocked that a union allowed the services of its members to be so devalued that they sought this route.
Without tax relief on travel and subsistence it would not be worth my while working. My last contract was a 100 mile round trip each day. Not only did this cost. A fortune each week in fuel, but also the wear and tear on my vehicle. As a teacher I am often in different schools on a daily basis. Whilst the is usually a school canteen on site, the food is so poor that I will not use the facilities. I usually leave site for lunch.
Due to the distances I have to travel at short notice the proposed changes would mean that I would be restricted to where I would work due to travel costs.
I work as a supply teacher in the rural area of Lincolnshire. Sometimes my travelling can be up to one hour or more. Without subsistence for travel, I would not be able to offer my services to such a wide range of schools.
This is a short-sighted and mean-spirited move by the government. Mean-spirited because it seeks to remove a concession that is a vital component to a fluid and mobile contract workforce. Short-sighted because it will simultaneously push up cost, depress the market, and lower tax receipts. I really do believe contractors AND government will both lose if this measure is implemented.
In other forms of self-employment and in paid employment you are able to claim expenses for travel and subsistence. Why therefore should contractors be subject to any different rules?
As a cover supervisor I can only get work when lessons need to be covered. I get £30 for half a day and £60 for a full day of work. Holiday pay and administration is taken out of these wages. If I did not get my subsidence and travel expenses paid I would be left with hardly any wages. MP's need to consider this when they eat their £150 lunches which they do not have to pay for themselves!
I am an agency teaching assistant who works all over the west midlands. Going from one place to another possible daily. It is very important to have the expenses petrol and food assistant has Ibam on a low wage and need ever penny I get.
I work as a supply teacher for two supply agencies.
This would affect me massively as I have to travel from Essex to London everyday to get to the school that I have been placed to be sub work for and I wouldn't have taken the position if it was for my mileage that i was able to claim to reduce my tax, I needed the assurance that make sure it was worth taking.
It is frustrating that workers are progressively having rights stripped from them.
I was really disheartened to hear about potential changed to the budget.
We have a right to claim on expenses and other costs. We support the economy and our skills and training support, service, manage the areas in which we are qualified in.
My concern is that I use an umbrella company as I am a contractor in an industry that will not use the self-employed, but instead will only use Ltd liability companies. My choice, therefore, is either to set up my own company or to use an umbrella company. As I only work 2-days a week I chose an umbrella company for convenience, but feel I am penalised, particularly in the amount of employer NI I pay compared to if I was self-employed or if I set up my own company.
Government seems intent on destroying a part of the services economy. Abolishing tax relief on travel and subsistence for contractors will mean I will no longer be able to accept work with long commutes. The number of opportunities open to me will diminish. I will either have to find lower paid permanent work or join the unemployment ranks. If my expected outcome proves typical for other contractors then this measure will backfire. The government and contractors will be left poorer. The government will of course claim it a resounding success.
As a Limited Co Contractor, I would like to know if subsistence is to be taxed, will this also apply to permanent workers who, undertake rolls at at different location. which becomes a temporary place of work.
the government want us to get on our bikes and find work and know want to penalise us for traveling in search of work
This decision/rule is shocking this is first step to forcing IR35 on every contractor.
Working with an umbrella company costs me money.
Last year I spent a considerable period of time working 45 miles away. I spent a lot of money on petrol and the maintenance of my car. Yes I claimed my mileage allowance as I was entitled to. However I also spent the best part of 3 hours a day travelling in order to do my job. I do not choose to work miles away. I go because that is where the work is at the time. I do not choose to add miles to my car. I just need the work. I do not think it is a bonus to claim for mileage - it is a necessity. No mileage expense allowance and people will just not go. It is hard enough being a supply teacher. You get work booked, another company phones you for work , you turn them down, and then your original booking can be cancelled. Then no work. The inconvenience of the job is huge. I love my job and that is why I do it. However it may become unaffordable if this goes ahead.
My main contract is in London at a customer site for my main client, with train travel, tube and accommodation costs I have nearly £1000 per month in expenses, this legislation could have dramatic effects on me and where I choose to work, where I live in Cheshire rates and opportunities just aren't as plentiful as in London. The Chancellor is punishing people the conservative party are meant to help.
Because of the niche IT skills, potential clients are scattered around the uk and permanent work locally is a rarity
Regarding the proposals to end tax relief on travel and subsistence, I'd just have to say that because of where I live most of my roles require me staying away from home Monday to Friday.
Removing travel and subsistence expenses from my day-to-day activities will make me far less competitive on the open market as a small contractor compared to much larger companies who may be able to absorb the cost associated with their abolition.
I am finding it difficult to get full time work in education-so-as a teaching assistant i work for an agency who use an umbrella company to pay me . My rate per hour is very low-just above minumum wage. the fact that I can get help towards travel and food expenses is a bonus. Please do not end this. The government needs to address the fact that wages in many sectors need to rise -the people like me who do what are arguably among the most valuable jobs in society get paid little for it .Address the Gap between rich and poor-not make the poor-poorer.thanks
The loser in the long term will be the Government and HMRC. Industry will lose access to contractors living outside their immediate region and won't be able to fulfil contracts that they otherwise might. In the currently competitive and turbulent marketplace, less contractors = more staff = more redundancy payments and jobseeker's allowance payments when things get a little tight, and who foots that bill?
Agency work completely sucks! I have worked in 3 different sectors this year and have had very similar experiences in each - poor rates of pay, no security, a significant percentage going to an umbrella company, agency fleecing the employer. The bonus for doing a conscientious job? Getting shifts next week or the unconfirmed possibility of future work.
There will be a complete breakdown in construction after the expenses are removed after april 2016, I will tell you my typical working week, up at 6.45, make pack lunch at my expense (no claim here, drive to work from say 4/5 miles up to an average of 40- 70 miles away to sites all over devon, public transport does not work for me and hundreds of thousands of other construction trades the timetables and cost etc will not work, plus I have to carry a van full of tools for my trade as a carpenter.joiner I drive to work at present exeter, a round trip of 42 miles, I park in the town 5 minutes walk from site cost= £10.80 a day I walk during the course of the day back/forth to my van for tools as my jobs change, its not safe to leave my tools all over the site as they walk have over £6000 of tools (you have to supply all tools as contractors supply none), I also sit in my van at break times as most site provide a small canteen and there are to many men on site. So when the expenses are removed, and we are working through agencies and on paye, which i am at present through an umbrella company the whole thing will fall down If all constructions guys where put on the books and paid expenses like back in the 70s fine, but all main contractors and sub contractors and also agencies etc have no wish to have men on the books and they all want the hire and fire as and when req labour force as present, I have worked as a carpenter for 45 years first on the books for a company then a period on the 714/715 system (which was the best ) then sc60, then cis - 20% now umbrella so i think along with many more men in construction it will not be worth going to work without any kind of tax relief on van/motoring costs, tools and constant replacement of , parking to pay for etc my van is approx 125 per week to run, parking for 5 days =£54, tools replaced or more, =£400.00-1000 per year so please tell me how its all going to work ps my site has a large east european work forces as well who are all on a lot lower wages than brits thanks
A transient workforce is essential to the IT industry and these proposed HMRC changes would severely impact the flexibility and availability of getting the right person into the correct temporary contract employment.
As a part time exam invigilator in Secondary schools in London the impact of not being able to claim my travel costs would mean the level of pay would be too low to continue with this worthwhile and enjoyable work.
Government policies have allowed Schools to manage their own budgets and in doing so almost every LEA recruits supply teachers through agencies. We have no choice in the matter and if working directly for an LEA I would earn 130 a day instead of 90 which is what I earn now but only recently as before was 85. I travel as many as 80 or 90 miles a day fairly often and if I were not able to claim my expenses out of tax I would have to refuse work since it would bring my actual pay down to approx55 a day.Add to this the fact that I only get paid for term time and already you see that there are three months a year with no money. Also there are quiet periods when there is little work such as the first two weeks after a holiday so in reality I only work 7 months a year. I would not put myself through the stress of this work when I could get the same amount or more over a year working a couple of hours longer in a shop.Think again politicians you need supply teachers as there is now a 50% drop out rate in this profession after the first two years, a government that denies hard working people an umbrella company whilst allowing Star bucks and alike to use our communications networks and work force here in Britain whilst setting up a so called office in The Netherlands to avoid tax and chasing after us the little people cause we are the easier target will never get my vote or respect, It was government that enabled the supply teachers agencies to flourish while doing down teachers pay that necessitated us using umbrella companies in the first place. Governments have become to expensive and greedy since 50% of all taxes is used to govern us . Scoundrels if you take away my umbrella company as I will be below the breadline without them instead of on the bread line as I am currently.
I have no choice other than to use an umbrella company as the company I work for only employs through one. As I am employed in a wide variety of schools over a 50 mile radius and have generally no idea where I'm working from day to day I find it stunning that I am being told by the government that I am dodging taxes by claiming fuel allowance that an executive working for a company or a member of the armed forces claiming home to duties expenses would be entitled to claim. It was a big enough shock to find out that I am paying employers and employees tax but to be told that I'm taking money illegitimately and basically be told I'm a tax dodger was a harsh blow.
I operate a Limited company providing IT consultancy services, and therefore expect to be able operate as any other IT consultancy such HP or Computacenter on a level playing field.
I am not an umbrella employee - I operate via a limited company, so on the surface the changes should not apply to me.
I travel various distances on a weekly basis using my own vehicle. This can on average be between 250 and 350 miles. I am now going to be expected to cover the loss of tax relief on my mileage, effectively a pay cut in my take home pay. I would like the current government to look at the top end of the earnings ladder where the real savings could be found in tax avoidance, instead of hammering the ordinary working man (as usual), trying to earn a decent wage.