Employment intermediaries
As previously announced, the Government will introduce rules from April 2016 to restrict tax relief for home to work travel and subsistence where workers are engaged through employment intermediaries such as a personal service company (PSC). From April 2017 public sector bodies engaging intermediaries will be responsible for operating payroll taxes.
The new legislation will remove tax relief for the cost of home to work travel for workers employed through a PSC. Currently, where PSCs supply temporary workers to end users the workers have a single continuing employment with the PSC and so travel from home is treated as being to a temporary workplace, resulting in the cost of travel being eligible for tax relief. From 6 April 2016 this relief will no longer be available.
Where the client is a public sector body new rules will be introduced from April 2017 to shift the burden of applying PAYE and NIC from the intermediary to the public sector body.
Source: Smith Williamson, Chartered Accountants