Travel & Subsistence (T&S) Regulations
I’ve attended many consultations, read lots of articles and I’ve written a recent article myself on the planned changes to legislation regarding T&S tax relief for contractors that fail the new Supervision, Direction and Control (SDC) test which is taking effect on 6th April this year.
Concerned that clients aren’t fully aware of the possible impact
Based on numerous conversations with our clients and associates I’ve concluded that there is apathy and a lack of awareness amongst clients and their Umbrella and PSC contractors about how these changes could affect them.
Recent research has revealed that only 35% of clients are fully conversant with the new Travel & Subsistence (T&S) regulations, with 38% of operational teams claiming to be fully up to speed and only 14% of HR respondents.
Client research reveals lower net pay for contractors
Over 450 clients responded to the research conducted by a collaboration of trade and professional bodies, the FCSA, CIPD, CBI and REC, to understand the levels of awareness of the new tax legislation.
- 92% of these clients will not be compensating workers for the financial loss that changes to Travel & Subsistence (T&S) tax offset rules will present.
- More than 79% of these clients expect to keep rates static and believe that their decision will have a negative impact on workforce flexibility, competitiveness and their ability to attract and retain staff.
In other words, clients intend to keep their rates of pay static meaning lower net pay to the Umbrella and PSC contract workers that fail the SDC test.
Are Umbrella and PSC Contractors aware?
The new legislation takes effect in less than two weeks and in my opinion it will impact most workplaces
Those who understand what the new T&S rules mean and based on this research they believe that the legislation will significantly reduce net pay. The question is, are Umbrella and PSC Contractors aware of this?
So far Umbrella and PSC Contract workers have been conspicuous by their silence. Is this because of their lack of awareness or are they simply assuming that they can continue unaffected? These new regulations will reduce their net pay when the new T&S rules come into effect.
Be aware or beware
I believe that we’re now in the calm before the storm. If I’m right, that most Umbrella and PSC contract workers are not aware of the true impact, we could be on the verge of an outcry when they see their net pay reduced, in the new tax year. They will then realise just how much worse off they’re going to be and we can only guess what their reaction will be.