Contractors urged to voice their thoughts on expenses
One of the prevailing topics that the contracting community has been focussed on in recent months has been the ongoing discussion of how travel and subsistence expenses will be treated in the future. Proposals to limit the ability of contractors to claim travel costs as a tax deductible expenses have caused consternation amongst independent professionals in a number of sectors, with plenty of organisations expressing their concern that such a move would limit the effectiveness of the flexible workforce and potentially damage the UK economy as a result.
The narrow definition of Supervision, Direction and Control has come under fire from those who believe that it is almost impossible to define these elements in a way that can actually satisfy everyone when it comes to the false employment legislation. Being unable to ascertain for sure whether someone qualifies as employed or self employed has meant that contractors are suffering disproportionately as they are limited as to the expenses on which they can claim tax relief which could have a serious impact on their incomes.
Whilst some are worried that they could be retrospectively charged tax and National Insurance on their expenses if HMRC find them to have been claimed incorrectly, and others are simply finding it easier not to claim such expenses, even if they could be legitimately owed. There is an argument that suggests that any contractor with a project brief could be considered to be working under SDC, and although case law doesn’t support this situation, the guidance is not clear enough to rule it out altogether in cases where there is ambiguity.
Although this issue only affects those who work through limited companies or umbrella companies, the confusion could cause some to avoid taking contracts where there expertise could be invaluable because of fears that they will be out of pocket when it comes to expenses.
The deadline for interested parties to submit their comments on how unworkable the proposed changes to the legislation are is the 30th of September, so bodies representing independent professionals are urging their members and other flexible workers to put their thoughts forward to strengthen their case.
If you want to gain a better understanding of the types of contractor expenses that you can claim, and the advantages and disadvantages of a limited company then talking to a contractor accountant will help you to maximise your income and save you time.
Our team are experienced in helping people to save money, and we offer packages specially designed for those who work for themselves, so call us today on 01442 275789 or email firstname.lastname@example.org.