Employment intermediaries: travel expense guidance

27 April 2016

Guidance about the treatment of travel expenses for workers providing personal services to clients through employment intermediaries has been published; however the legislation it reflects contains a technical error about where the supervision, direction or control test applies.

This guidance applies from 6 April 2016 and reflects the legislation as currently laid before Parliament in the Finance Bill 2016. The error will be corrected at the earliest opportunity. Once the legislation has been corrected, the guidance will be updated.

There will be a corresponding amendment made to the Social Security (Contributions) Regulations 2001 (SI2001/1004) for national insurance contributions purposes.

For practical purposes, HMRC does not consider that this correction will alter the ultimate result for the vast majority of workers currently engaged through employment intermediaries, including umbrella companies. Those who are working under supervision, direction or control will, in most instances, be akin to those who are an employee.

Where a worker is engaged through what is commonly known as a personal service company (PSC) (including a managed service company (MSC)), then the rules will remain unchanged.

Travel and subsistence expenses for workers engaged through 'employment intermediaries' from 6 April 2016