Workers operating within umbrella companies will still be able to claim tax relief on travel expenses after the government decided against a clamp down.

After consulting on the tax relief, it will leave current rules alone. However it will 'refocus' its efforts on the area to make sure of compliance, which if it does not improve will revisit at a later date.

Anne Redston, visiting professor at Kings College, said that changing the rules would have been a 'step too far' for the taxman.

'It would be too difficult to identify an umbrella company.'

Umbrella company strcutures were concerned that their staff would lose ability to claim back expenses against their tax bill.

Further reading:

Budget March 08: Government targets umbrella companies