Is your organisation ready for tax changes to travel and subsistence?

Paul Snell is managing editor at Supply Management
posted by Paul Snell
in Law
4 January 2016

From 6 April this year temporary workers employed by an intermediary will no longer be able to claim tax relief on travel and subsistence.

But awareness of the changes, confirmed in the Spending Review in November 2015 and included in the Finance Bill, remains low among procurement professionals according to initial feedback to a survey by CIPS and knowledge partner Adecco Group.

The poll is being carried out to understand the readiness of members before the new regulations are introduced. Just over half of members canvassed so far knew when the rules were due to come in.

The institute is keen for more members to participate in the study, which can be found here, to obtain a clearer picture of the situation. The deadline for responses is 10 January. Those who take part will receive a full report.

The change to legislation affects those employed by organisations which supply labour, such as umbrella companies or recruitment agencies. It is estimated around 430,000 people will be affected by the change.

But just 7 per cent of members have consulted their employment agency suppliers about the impact of the changes on the supply chain, according to the poll.

The idea behind the change, according to HM Revenue & Customs, is to prevent these workers benefitting from tax relief when travelling from home to work and vice-versa, which is not available to other employees. The UK government believes the tax change will generate an additional £155 million in the first year.

The potential impact of the upcoming legislation will be the subject of an event for CIPS members in London on 2 February.

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