Travel and subsistence: what does the future hold?

‘How ready are you for the changes to travel and subsistence (T&S) expenses?’ This was one of the big questions debated recently at the latest Anderson Group roundtable in Glasgow. The event saw 10 of Scotland’s top recruiters come together to discuss the potential impact of the new rules coming into force this April. Other issues on the agenda were the replacement of Salary Sacrifice by Statutory Exemptions and PSCs set to be captured by IR35 rules.

With such significant changes about to occur it came as no surprise that all attendees had major concerns. Every recruiter present recognised that the contractor industry will be shaken by this seismic new landscape post April, with implications all the way through the supply chain, including contractors, intermediaries, agencies and hirers.

Contractors will no doubt be looking for a rate increase to compensate for their lost tax-free expenses, while Umbrellas will no longer be able to charge the same level of margin from contractors and so won’t be able to agree to the same level of processing fee arrangements with the agencies that they currently work with.

With contractors squeezing from one end and hirers resisting rate increases from the other, attendees were in agreement that new solutions would be vital for their business going forward, with most still busy researching their options.

Items on agency checklists included ensuring that future contracts were totally compliant; otherwise there was a danger of prosecution.

The overall consensus was that there remains a great deal of work to do, in examining the uncertainties and lining-up possible answers to the new challenges. Anderson presented some appealing and innovative post April solutions, but some agencies have decided to wait to see the final legislation in April before acting.  Whatever the eventual outcome, all attendees were very aware of the need to examine any new solutions to make sure they would be compliant, cost effective and easy to work with.

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