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Every day, thousands of permanent and temporary employees commute to work and it costs them money to do so. Contractors outside IR35 legislation can claim these costs as a business expense.
These expenses are what’s known as Travel and Subsistence. However, the imminent removal of Travel and Subsistence claims is estimated to affect over 750,000 contractors who work under an umbrella company or find themselves operating inside IR35.
Contractors who work via umbrella companies are likely to be the most affected by the Travel and Subsistence changes. If you are a contractor working via an umbrella company, you might want to find out more about these changes and learn about the alternatives available to you. You may also want to ask yourself the question, “will I go the distance with my umbrella company?”
What this means for you:
As announced in the Autumn Statement 2015, if you work for an umbrella company, after 6th April 2016 you will not be able to claim Travel and Subsistence expenses.
Our previous blog regarding these changes takes into account the UCATT comments that this will affect you more than the Government estimates, and stresses the importance of finding out what your options are for the future.
It’s time to find out if you will go the distance with your umbrella company payroll solution. Will you let your umbrella company cost you? Or will you take a leap in the right direction for your contracting career and personal finances?
If you are worried about how much take home pay you could lose if you stay with your umbrella company, you’re not alone. Thousands of contractors spend hundreds of pounds on Travel and Subsistence costs directly related to their contract work. Whether you claim train tickets, overnight stay costs or a meal on the train to your job site, not being able to receive tax relief for these claims come 6th April will add up to a significant, but avoidable loss.
What are the alternatives?
There is an alternative option – setting up your own limited company. If you are outside IR35 legislation and you become a director of your own limited company, you will still be able to claim Travel and Subsistence expenses. Whilst the umbrella company option might have its advantages for short term contracts, you need to decide if going the distance with your umbrella company will be more of a loss to you than a gain for your future.
You can find out about the alternative of a limited company solution on our page. This page will breakdown how we can help you with the set up and running of your limited company. Not only will you be able to claim expenses for Travel and Subsistence, but you will also find that it opens up a range of other tax saving advantages and tax planning benefits.
If you would like to discuss your options or speak to one of our specialists on 01707 871622 or find out more about how to avoid being affected by changes to Travel and Subsistence on our blog switching from an umbrella company to a limited company. You may also be interested to discover more about the limited company expenses.
To find out more about how we can help you, request a callback or read about our limited company services by using the buttons below.
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The Churchill Knight blog is regularly updated with helpful content for contractors and freelancers – especially articles that answer the most frequently asked questions about umbrella companies! Please pop back shortly to see the latest articles written by Andrew Trodden (Marketing Manager) and Clare Denison (Marketing Executive).