date posted: 17-12-2015

Draft legislation has confirmed that there will be a restriction of travel and subsistence expenses for contractors employed by umbrella companies who are deemed subject to (or the right of) supervision, direction and control, as to the manner in which they carry out the work.  Contractors working through PSC’s will not be subject to the restriction as long as they are outside of IR35.


Sterling is one of the longest established providers in this industry and we have built our reputation over the years on our professional compliant service.  We are more than used to dealing with the effect of government legislation and we see the new T&S legislation as no different.  We firmly believe that the many compliant providers in our industry such as Sterling are again paying the price with this legislation for those providers who are not compliant and who do not have the contractor or agency at the centre of what they do.  It is the providers who do not follow government guidelines and allow expenses to be claimed in an inappropriate way that attract HMRC attention and ultimately affect our industry as a whole.  For some of those providers it appears very easy for them to stop trading when the going gets tough and in some cases close down and open in a new name whilst carrying out the same bad habits until the next time and the cycle continues. This is why we urge you to not jump in feet first with some providers who are offering solutions that seem too good to be true, because in our experience they usually are.  Sterling is a well-known established brand and it has been our pleasure to work with you for many years.
We are waiting for further guidance from HMRC around SDC and once this is more defined we will keep you fully updated as to what changes will be made from the 6th April 2016.  Before applying T&S relief, it is the responsibility of the intermediary to ensure that such relief applies. Once applied, any potential liability will fall with the intermediary if HMRC challenge the relief given.  We envisage working closely with our agencies and clients to ascertain if SDC applies.  There have been no announcements on IR35 changes as yet, again we will keep you fully updated if this changes.  Sterling is working closely with our advisers and professional bodies within the industry and our intention is to keep you fully updated over the coming weeks to ensure the smooth transition of any changes prior to April 2016.  We certainly feel that Umbrella companies and PSC’s are here to stay and once we have compliantly made the necessary adaptions to T&S it will be business as usual.

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