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Jonathan Greenhalgh Candidates, Candidate

T&S Expense Rules Explained

Stock Photo 87314921 British Pound Banknotes

The new legislation banning the payment of Travel and Subsistence (T&S) legislation has made life much more difficult for all those working in the temporary labour market.

It is now clear that Recruitment Agencies and End Users will not co-operate with Umbrella Companies in determining whether Supervision, Direction and Control (SDC) applies (if SDC does not apply, temporary workers can still claim T&S).

This means that it will be left to Umbrella companies and their workers to decide whether SDC applies! As long as they demonstrate that "robust procedures" have been followed they should be fine ... others in the supply chain are safe from any debt transfer (from unpaid Employment taxes). Good News for many!

It is important to note that non-travel related expenses can still be claimed when appropriate. The flowchart below is a handy summary of the new T&S rules which incorporate a Supervision Direction and Control test. Contact us for more information on the SDC test. There are 4 basic models now in place in the Umbrella market:

Model 1- Straightforward outsourced payroll where the recruitment agency pays the cost

Model 2- Professional Employment Model (PEM): Old umbrella model where the worker is an employee with employment rights. No travel expenses are claimed BUT a year end P87 claim can be made by the employee

Model 3- Mileage only expenses are claimed. Expenses claimed will vary so salary sacrifice rules may apply if there is no “fixed expense” agreement up front

Model 4 – Traditional Umbrella model where expenses continue to be claimed. Fixed Expense “pot” is agreed up front. Contractor can claim expenses including T & S + Infographic.