Umbrella companies' travel relief untouched
Taxman to hold off on plans to change the rules by which temp workers using 'umbrella companies' can claim tax relief on travel expenses
Workers operating within ‘umbrella companies’ will still be able to claim tax
relief on travel expenses after the government decided against a clampdown.
The taxman has decided to hold off on plans to change the rules by which
temporary workers using umbrella company structures claim tax relief on travel
expenses. But HM Revenue & Customs will ‘refocus’ its efforts on the area to
ensure compliance. If this does not improve, HMRC will revisit rule change plans
at a later date.
Anne Redston, visiting professor at Kings College, London, said changing the
rules would have been a ‘step too far’ for HMRC. ‘It would be too difficult to
identify an umbrella company.’
In an earlier consultation document the Treasury said there was currently
£300m tax relief for travel claimed each year.
But Redston said it was unclear how much of that was avoidance and poor
compliance.