April 2016 - Changes to contractor expenses
APRIL 2016 LEGISLATIVE CHANGES
From April 2016 we’ll introduce a new service for contractors who are outside Supervision, Direction & Control (SDC) so they can continue to claim expenses.
Nasa will work with the contractor to put them through the correct option, so all you need to do is send over their details. Our services from April 2016 are outlined below.
SDC - YES
For workers who are not able to claim expenses under SDC rules, our Simple Umbrella is the answer. A simple umbrella payroll with full employment benefits such as Childcare Vouchers, Auto Enrolment Pension and the added bonus of having access to cashback and money saving schemes through QuidCo, a partner we will introduce them to.
SDC - NO
Workers who are not under SDC can continue to claim expenses in addition to great benefits available with the simple model. The expense process will change slightly as salary sacrifice rules are also changing. However, Nasa will support all workers to get the maximum benefit from using the umbrella service by claiming mileage or subsistence with other claims submitted at year end.
Certain contractors who plan on contracting for a longer-term and earn over £15 per hour can use our Limited Company services. Where outside of IR35 T&S costs can still be claimed. We offer complete set up and full accountancy services including business insurance, superb online systems from FreeAgent and IR35 appraisals as standard.
OUR BEST ADVICE
Offering a core of compliant contractor services at excellent value, Nasa are best placed to support you and your contractors through this period of change.
Nasa currently payroll in excess of 2,500 contractors per week and supporting a further 1,200 LTD Company contractors. We assess each contractor individually to determine which service option may be the best for them.
We strongly believe that umbrella companies will continue to play an integral part in supporting agencies and contractors post April.
Benefits to our agency partners continue to include:
Removing the concerns of directly employing the contractor
No costs for SSP, SMP, SPP
No costs for Pensions Auto Enrolment
Dedicated & proactive support teams to look after your contractors, their queries surrounding tax, NICs and other HR areas
For those contractors who may not be able to claim expenses the umbrella will provide:
Full employment benefits such as SSP, SMP, childcare vouchers & pensions
Cash back & high street discounts from a leading market provider
Continuity of employment to simplify contractors tax affairs
Full HR process to manage contracts etc
APRIL 2016 WHAT WILL BE CHANGING?
Following HMRCs consultation this summer, we now have clarity of the draft amendments to the Finance Bill 2016. This release confirms the changes to Travel & Subsistence expenses for umbrella and PSC contractors from April next year.
Nasa will be working closely with Professional Passport and PRISM over the coming months to ensure our services remain compliant and offer the very best value to our agency partners and contractor clients.
SO WHAT WILL THIS MEAN TO CONTRACTORS?
We now know that umbrella workers who are subject to the Supervision, Direction or Control (“SDC”) of any party in the supply chain will not be able to claim tax & NIC relief on travel and subsistence costs from April 2016.
It will be assumed that all workers via an umbrella company or employment business are under SDC. It will therefore be up to the umbrella to assess where SDC may be absent in order to allow a worker to claim expenses. HMRC are due to release further clarification on how SDC is assessed in the coming months.
Nasa will be working on an SDC test with our advisors, Professional Passport, to support our umbrella service and agency partners from April 2016. We will communicate this is due course as HMRC guidance is released.
Limited Company ( PSC)
PSC contractors operating outside of IR35 will still be able to claim travel & subsistence costs through the PSC. There was also no further news on any review process for IR35.
All Nasa contractors receive an IR35 appraisal with our PSC services and this will continue to ensure all those outside of IR35 can continue to claim travel & subsistence expenses as they do now.