Mileage Only Expenses
Following the changes in legislation from 6 April 2016 workers who are subject to (or the right of) supervision, direction and/or control (“SDC”) will no longer be eligible to claim tax relief on travel and subsistence.
As mileage falls outside the relevant salary sacrifice rules Bright Sky can offer mileage only umbrella to those who meet the criteria and can evidence they fall into one of the following categories:
- Outside SDC; and/ or
- Are a mobile worker
The changes in legislation are written in such a way that the liability of relieving any mileage expenses, under this model, when the criteria is not met will sit with the directors of the umbrella company and therefore a number of compliance checks would have to be completed on each assignment before a contractor would be given the option of mileage only umbrella over PAYE umbrella.
Should the criteria not be met once reviewed by Bright Sky’s Legal Team the contractor will have to be paid via PAYE umbrella however if the contractor disagrees and believes they are entitled to claim tax relief on expenses due to one of the above then Bright Sky can assist in completing a yearend Repayment Claim or Tax Return. (This means the contractor will not receive weekly relief).
From the information and evidence obtained from the below Bright Sky must be able to reach a reasonable conclusion as to why SDC does not exist.
- Is the contractor paid a higher rate, experienced and qualified?; and
- Review a copy of the agency contract; and
- Complete a questionnaire with the worker; and
- Produce a summary report to determine the outcome of the evidence
If the above are met and a reasonable conclusion for outside SDC is met then mileage can be claimed each week and any claims outside mileage will be collated and submitted via a year end claim.
A mobile worker is someone who moves from site to site during the working day or has no main place of work. Bright Sky will;
- Establish the permanent place of work (if applicable);and
- Review assignment schedule; and
- Confirm schedule of work (if applicable)
If the above are met the contactor can claim from a permanent place of work to temporary place or home to temporary place of work. The contractor must provide evidence they are temporary workplaces and reasons why they had to travel. This can be done each week on the expenses claim form and again any lunch etc can be added to the claim form and collated for a yearend return.
Any contractors who feel they are one of the above and do not pass the evidence checks can complete a yearend return to submit expense claims for tax relief to HM Revenue & Customs (“HMRC”).
Due to the amount of claims, refunds will more than likely be issued but this is not confirmation that HMRC feel the worker is outside SDC. Enquires could possibly come afterwards and if HMRC then find the contractor to be caught by SDC they will reclaim the monies along with interest.