In the lead up to the Autumn Statement, there was much speculation that the government would look to find a way of restricting the tax advantages gained by those who use personal service companies.
The good news is that the government did not announce any drastic changes, but the bad news is that the draft 2016 Finance Bill contains a provision which will restrict anyone who uses a personal service company, but is considered by HMRC to actually be under the ‘supervision, direction or control’ of the person engaging them to carry out the work, from claiming tax relief on travel and subsistence expenses.
At the present time, there is much confusion amongst many workers who use personal service companies as to whether they are in fact considered by HMRC to be under the ‘supervision, direction or control’ of the person engaging them to carry out the work. Workers who use a personal service company will now have to decide whether or not they think they are caught by the new changes which restrict the tax relief that is available on travel and subsistence expenses.
If you use a personal service company, and are not sure whether or not you will be caught by this change, please get in touch.