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Changes to allowable expenses placed under spotlight

The future of allowable expenses for temporary workers was one of the main topics discussed at an Anderson Group event in Manchester recently. Senior staff from recruitment agencies gathered to hear Anderson’s legislation experts provide an update on reporting under OIL (Onshore Intermediaries Legislation) and the planned changes by HMRC on how expenses are dealt with.

One of the big discussion points was how HMRC’s intention to make changes to the Salary Sacrifice legislation, which will not be subject to a consultation, is set to dramatically affect the way in which temporary workers are supplied to UK industry – even more so than any upcoming changes to T&S regulations. It was clear to everyone that the current proposals to restrict (and in some cases, remove) the ability to claim valid business expenses, will no doubt have a significant impact on the provision of a mobile and modern workforce.

Contractors are not likely to accept a contract that requires them to work long distances from home and incur extra living costs, if they are unable to get immediate tax and NI relief for those extraordinary expenses. The result would be a reduction in the pool of skilled labour prepared to accept temporary work, coupled with a significant increase in the rates they command and this can only have an adverse effect on the UK PLC.

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