Changes to Travel & Subsistence Claims


Travel and Subsistence.

New Rules

As of 6 April 2016, any worker employed through an umbrella company or a limited company director working inside IR35 can no longer claim for travel and subsistence costs as expenses and incur tax relief on these costs.

These restrictions will only be in place for workers who are under the SDC (Supervision, Direction & Control) of their end-client, or are essentially working inside IR35.

Contractors working outside of IR35 will not be affected by the proposed changes. However, limited company directors, which are already deemed ‘caught’ by IR35, will not be able to claim tax relief on their expenses in the same way as they have previously done.

What does Supervision, Direction and Control actually mean?

HMRC has produced some outlining typical examples and scenarios under the new expenses legislation to help contractors understand the new rules. Under the SDC definitions, supervision is considered to apply to someone managing a person doing work to ensure it is being down to the specific standard, direction means someone make a person carry out their work in a certain way by providing instructions and control means someone dictating what work a person does.

The document also provides helpful examples and scenarios for different contractor types such as IT consultants, professional chefs and market researchers.


For more information click here for the HMRC’s guide to travel & subsistence expenses.