In his budget speech, the chancellor disclosed that he intends to “crack down” on umbrella companies travel & subsistence expenditure. What the detail says is as follows (our emphasis added):
…that the government will consult on detailed proposals to restrict tax relief for travel & subsistence for workers engaged through an employment intermediary, such as an umbrella company or a personal service company, and under the supervision, direction and control of the end user. …The changes will take effect from 6 April 2016 and will be legislated for in a future Finance Bill. The government wants employment intermediaries to provide workers with greater transparency on how they are employed and what they are being paid. The Department of Business, Innovation and Skills will consult on these proposals on transparency later this year
We understand the test of being under the supervision and control of the end user will be the same test of control used from an IR35 perspective but since this a future delivery, we will keep it under review. After the election this could be turned into an attack on personal service companies.
What has not been widely publicised is the requirement for companies to keep a register of persons with significant control which will need to be filed at Companies House after April 2016.