21 July 2008
Tax relief for travel expenses: temporary workers and overarching contracts
This consultation seeks to expand and test the Government’s analysis of those structures using overarching employment contracts –umbrella companies and employment agencies- in terms of the size of the sector, their role within the wider labour market and the extent of the problems arising from the use of these structures.
Umbrella companies and some employment agencies make use of overarching employment contracts which enable some temporary workers to gain tax relief for travel expenses not available to others working in similar circumstances. There is also evidence of widespread abuse of the travel expenses rules by these structures. Non-compliance and the use of these structures to pay less income tax and national insurance contributions (NICs) lead to a loss to the Exchequer, as well as further problems.
The Government would welcome comments on its analysis of the sector and the labour market in which they operate, and on the problems identified. Comments on the possible actions to address the problem, including the effect they may have and any alternative approaches, would also be welcomed.
All comments should be received by 13 October 2008, and should be sent to:
Lucy Cowan
Travel expenses consultation
Personal Tax Team
HM Treasury
2/SE
1 Horse Guards Road
London
SW1A 2HQ
Or e-mail travelconsultation@hm-treasury.x.gsi.gov.uk