PCG to consult on expenses legislation possibility
The Government has announced that it intends to come down hard on umbrella companies and agencies using expenses as a way of avoiding taxes.
Many businesses have been using travel and subsistence expenses to mitigate tax payments and the Government is now consulting on how best to deal with the issue. PCG Managing Director John Brazier expressed his support for punishing those blatantly exploiting the rules but is concerned legitimate contractors may suffer as a result.
"Some umbrellas and other providers have been blatant in advertising their use of expenses policies to minimise tax," he said.
"Thanks to some providers pushing the boundaries rather too hard, we now face the risk of another anti-avoidance measure that could have unexpected knock-on affects that at the moment we can barely guess at."
The consultation does explicitly state that it is not intended to alter the expenses treatment of contractors who run legitimate limited companies and PCG will responding fully to help ensure this is the case.
"It’s positive that the Government is consulting at this early stage, and has left open the possibility of not legislating at all," Mr Brazier added.
