The Spending Review and Autumn Statement has been set out to Parliament – here’s a summary of what was announced and some details regarding the anticipated reforms to travel and subsistence relief for workers engaged through employment intermediary which will come into effect on 6 April next year. Draft legislation is expected in December.
“As confirmed at Summer Budget 2015, the government will legislate to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company. Following consultation, relief will be restricted for individuals working through personal service companies where the intermediaries’ legislation applies. This change will take effect from 6 April 2016.” Employment intermediaries and tax relief for travel and subsistence: chapter 3.20 in the Blue Book
- Legislate to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company.
- Restrict relief for individuals working through personal service companies where the intermediaries legislation applies. This change will take effect from 6 April 2016.
- Take action against those who have used or continue to use disguised remuneration schemes and who have not yet paid their fair share of tax. The government will also consider legislating in a future Finance Bill to close down any further new schemes intended to avoid tax on earned income, where necessary, with effect from 25 November 2015.
- £717 million of sustainable resource savings a year by 2019-20, achieving £1.9 billion cumulative savings over the Spending Review period, representing a headline 21% reduction in baseline resource costs, delivered through digitisation of tax collection and a smaller but more highly skilled workforce
- £1.3 billion reinvested to transform HMRC into one of the most digitally advanced tax administrations in the world, with access to digital tax accounts for all small businesses and individuals by 2016-17, delivering an additional £1 billion of tax revenue by 2020-21 and sustainable efficiencies
- £800 million confirmed funding for additional work to tackle evasion and noncompliance in the tax system, delivering an additional £7.2 billion over the next 5 years
- £400 million total reduction in business customer costs by 2019-20
Continue to tackle fraud and error in the tax credits system and will work with debt collection agencies to collect £324 million of tax credit debts owed by 2019-20
Chancellor George Osborne’s Spending Review and Autumn Statement 2015 speech
Spending Review and Autumn Statement 2015: key announcements
Spending Review and Autumn Statement 2015: documents
We will follow developments as we approach April 2016 and post any relevant changes and tax implications for our workers in the meantime please contact your local Howett Thorpe office for any advice.