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Budget 2016: T&S Reforms To Go Ahead

Budget 2016: T&S reforms to go ahead

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The supporting documents accompanying yesterday’s Budget 2016 speech by George Osborne confirm that proposed changes to the rules on travel and subsistence (T&S) expenses for contractors will go ahead as planned.

There was, however, no fresh detail.

We expect to see updated Finance Bill legislation on or around 24th March, but are not anticipating any major changes.

Here at ADVANCE we have been busy developing compliant and commercially viable solutions that are fit for the new landscape, another key feature of which will be changes to the rules on salary sacrifice schemes.

With just three weeks to go until the changes take effect on 6th April, here are three points we’d like to emphasise to recruiters:

1. Going limited will be an option for some umbrella contractors

The new T&S rules will only apply to a limited company (PSC) contractor if their assignment falls within IR35. The majority of PSC contractors will therefore still be able to claim T&S expenses.

Here at ADVANCE we don’t believe that migrating contractors en masse from umbrella to limited is the right thing to do. However, if the contractor feels ready and we’re confident that it’s the right solution for them we will facilitate a smooth and seamless transition.

PSC contractors and recruitment agencies can take comfort from yesterday’s announcement that proposed changes to IR35 liability will only apply to PSCs working in the public sector.

Watch this space for more on these proposals, which are due to come into force in April 2017.

2. We’re ahead of the game on SDC

Supervision. Direction. Control. Three simple words that are reshaping the contract and temporary recruitment sector.

We are the only provider to have been assessing SDC in line with the Freelancer & Contractor Services Association (FCSA) code of conduct for the past two years, which is why we are confident in our ability to apply the new rules correctly. We are happy to absorb the risk and bear liability as dictated by the legislation.

That means ADVANCE umbrella contractors who we judge to be free from supervision, direction or control will still be able to claim home-to-work travel and subsistence expenses.

3. Umbrella without T&S still has benefits

For contractors deemed to be under supervision, direction or control, umbrella company employment with ADVANCE offers a wide range of benefits.

For the recruitment agency it means freedom from the costs, headaches and administrative burden that come with employing and paying contingent workers.

Meanwhile the contractor benefits from full employment rights, continuity of employment and shopping discounts through ADVANCE Rewards. He or she can also qualify for a free annual expense return with ADVANCE and may have the ability to be reimbursed directly for some expenses.


Contact our account management team today on 01244 564 564 for more information on our post-April 5th solutions.

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