I-PAYE is backing calls from the freelance sector for an exemption from any legislation that will prevent Travel and Subsistence claims for site based workers that attend site to work on specific tasks / projects.
This is following discussions between industry representatives, the CBI, HM Treasury and HM Revenue & Customs in recent weeks. In the separate meetings the HMT and HMRC officials had been left in no doubt that the proposed restriction could be very detrimental to UK PLC.
It is clear that the current test of Supervision, Direction and Control whilst achieving the current policy objective, fails when applied to site based workers. In general site based workers attend a site to perform a task of limited duration and once it is completed they move on to a new site and new client. Many workers in IT, Engineering, Construction and Power work on several projects a year and fit this definition.
Site based workers whether employed directly, operating through an Employment Intermediary or through their own Personal Service Company, had been the intended targets of the amendments in 1998 and this is clearly highlighted in HMRCs own internal manuals. Before 6 April 1998 if you had been a site based worker or a Director through your own PSC, then any expenses reimbursed would have been subject to Income Tax and National Insurance.
Applying SDC and the IR35 legislation to test whether a site is a temporary workplace, for site based workers, will result in many PSC and Umbrella workers being denied relief when those that are directly employed will be allowed to have T&S paid free of Income Tax.
In correcting one unfairness HMRC have created another.
If you are reading this article and are in one of the following categories then you might want to have your say.
- A site based worker that goes from project to project and is employed through an Umbrella.
- Working on a site governed by a Working Rule or Collective Agreement.
- A site based worker that goes from project to project and is employed through their own Personal Service Company.*
- An agency consultant that provides site based workers to end user clients.
- A Professional Adviser who has site based worker clients.
- A Representative Body who has site based workers as members.
- Agency Representative bodies that have members who provide site based workers to end user clients.
- Clients who utilise site based workers for their projects and are concerned that rates may need to be increased for extra Tax and NI costs.
*If a worker is found to be within IR35 then after 6 April 2016 any expenses reimbursed by the company, as well as dividends, will be re-categorised as earnings and subject to Tax and National Insurance, whether they are site based or not. IR35 is as subjective a test as SDC and open to interpretation and change as case law progresses.
If you believe that you or someone you know may be affected then you and they have until the 3rd of February to have your say on the draft legislation and can email your views to the HMRC Policy lead at
I-PAYE have launched an e-petition to bring this matter to Parliaments attention, which contains more information and this can be viewed at
Write to your MP and bring the issue to their attention. Unsure of your MP then you can find out who represents you at
Finally Don’t Keep this to Yourself. Please feel free to pass this email on to any person or contact you have.
As the beginning of this article states doing nothing is not really an option.
Article written by Paul Hughes from iPaye.