The call for evidence was initiated by the (last) government to consider (i) whether the tax rules for expenses of employment need to change to reflect changes in employment engagement practices, (ii) whether the rules and their administration can be made simpler and clearer, and (iii) why there has been a 25% increase since 2009-10 in claims to HMRC from employees for tax relief on non-reimbursed expenses. In their submissions to the call for evidence, the ATT, CIOT and LITRG suggest that the existing system is not broken, per se, but could certainly be improved.
April 2016 saw new rules limiting home to work travel and subsistence expense relief for workers employed through an intermediary, such as an umbrella company. Even where such expenses could be allowed, other new rules restrict the ways in which umbrella companies can reimburse workers’ expenses. LITRG reviews how the April 2016 rules are operating in practice. Umbrella companies have had to adapt and you may start to see some interesting issues in practice as a result.
The review, led by Matthew Taylor (Chief Executive of the Royal Society of the Arts), was commissioned by the last government to consider how employment practices need to change in order to keep pace with new forms of work – in particular those driven by online platforms. In their submissions to the review, the CIOT and LITRG both highlight the importance of tax – something not formally within the remit of the review – in the debate.
LITRG were recently invited to a private seminar held by the Royal Society for the encouragement of Arts, Manufactures and Commerce (the RSA) to debate the issue of employment status for those that work in the gig economy.