Benefit from Tax Relief on Contractor Expenses
If you are a contractor or freelancer then you have probably read various doom and gloom reports on how the Government is clamping down on the various tax reliefs you can currently legitimately receive.
There have also been consistent rumours for years that IR35 will be replaced and it will be almost impossible for contractors to work through their own limited company and benefit from the tax incentives this currently offers.
From next April there is also the new Dividend tax.
In George Osborne’s recent Autumn Statement, however, contractors were not even mentioned during his speech but there was one well hidden paragraph that may affect you, especially if you currently operate through an Umbrella Company.
From 6th April 2016 contractors working through an Umbrella Company will have tax relief on Travel & Subsistence restricted. So too will contractors working through their own limited company IF they are caught by the Intermediaries Legislation (i.e ONLY if you are caught by IR35).
Other Umbrella Company expenses such as accommodation are unaffected.
There is, therefore, a good reason to review your IR35 status and where possible operate through your own limited company.
As well as gaining tax relief for valid Travel & Subsistence (Food and Drink) expenses you can also benefit from higher net pay after tax.
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