The use of overarching employment contracts can enable umbrella companies and some employment agencies to change what would be a series of permanent workplaces (for which no tax relief is due for travel between home and work) into temporary workplaces (for which tax relief is due). As a result, the Treasury has issued a consultation paper on how to overcome this. The consultation runs until 13 October 2008.
The solutions that the Treasury has proposed include applying stronger action to address non-compliance under the existing rules (including introducing a transfer of debt provision similar to that in the Managed Service Company legislation), or removing the entitlement to tax relief for travel expenses for umbrella companies and employment agencies using overarching employment contracts.
Should you have any concerns over any existing or proposed arrangements that you have that might fall within the matters covered by the consultation document, please contact David Jenkins or complete the below contact form.