In previous years, temporary workers paid through employment intermediaries such as an Umbrella company were eligible to claim tax-relief by claiming legitimate business expenses incurred “wholly, exclusively and necessarily” in the performance of their duties.
Following a document published by HMRC in December 2015 entitled “Employment Intermediaries: Temporary workers – relief for travel and subsistence expenses” a new legislation was passed which came into force in April 2016 which now imposes greater restrictions in the claiming of expenses for temporary workers.
As a result, the only expenses that can now be claimed periodically is legitimate business mileage, whilst to be able to do so, you must meet a very specific criteria, set out as follows:
- You intend to work through Simplify for more than one assignment, and;
- Will not be working on the same assignment that is Temp-to-Perm, and;
- Your assignment is not due to last longer than 24 months, and;
- You are not working under the right to supervision, direction and control (SDC), or;
- You are working on multiple sites for the same End Client (Multisite rule)
How will I know if I’m under SDC?
Based on HMRC guidelines we would need to consider each of the following to determine whether you are under the right to SDC:
Supervision – is anyone overseeing your work, ensuring that you are doing the job you are required to do and that it is being correctly to a required standard? Or could anyone help you where necessary in order to develop your skills and knowledge?
Direction – is anyone guiding you in a certain way by providing you with instructions or advice as to how your work must be done? This could be before you undertake your work, whilst it is being undertaken, or later coordinating any amendments or modifications?
Control – is anyone dictating what work is required and how you go about completing that work? Or does anyone have the power to move you from one job to another?
If you can answer yes to, or are at least under to the right to any of the above situations then you are deemed to be operating under SDC.
How does the Multi-site rule work?
Even if you are subject to SDC you may be eligible to claim tax-relief if it is within your job requirement to move regularly between numerous sites as opposed to one or two fixed locations. To do so your assignment must conform to the following:
- You have not spent more than 40% of your time in any one location
- You do not have a routine of locations (i.e. visit the same site every Friday afternoon)
- Your area of work is not defined under a geographical area (i.e. East Midlands)
- Only mileage between sites is claimable, therefore if you travel to a depot at the start/end of each day you can only claim for mileage from that point to site.