Privately owned umbrella company, Paycheck Services Ltd. was established in 1997 by a contractor, for contractors. Built on reputation and recommendation and upheld by two generations, Paycheck's longevity and deep rooted values are comparable to no other Umbrella Company in the UK!

Travel & Subsistence for Contractors

And here we go again, yet more legislation changes for us all to contend with.

If you are not already aware, HMRC propose the restriction of travel & subsistence expenses for Contractors employed by Umbrella Companies, who are deemed subject to (or the right of) Supervision, Direction and Control, as to the manner in which they carry out the work.

At present (unless HMRC amend this also) the contractor/worker will still be able to claim site to site travel.

For the last 20 years in this industry we have built our reputation on our professional compliant service. We have always and, will continue, to offer best practise solutions to all our contractors/workers.

When HMRC release their final document in March (when the budget is announced) we hope it should give us all a more definitive guidance on how to assess SDC (Supervision,Direction & Control).

As a member of the group AUCAE (All Umbrella Companies Are Equal), we are being kept as up to date as is possible, with the current situation.  AUCAE attended a meeting with HMRC in January to ask for clarification as to what (if any) would be acceptable as evidence to prove there was no SDC.  HMRC were unable to provide them with an answer.

According to HMRC 80% of contractors/workers currently claiming expenses are not eligible to do so (in their opinion), and it appears they have no idea how to classify the other 20%.

This all stems from a ‘few bad eggs’ in our industry causing all Umbrella Companies to be tarred with the same brush.

We have dealt with numerous legislation issues over the years and you can rest assured we will handle this in the best way possible.

Our main aim will be for the protection of all, Contractors/workers, Agency and end clients.

We are aware that there are going to be companies out there who will try and develop radically new solutions in response to legislation adjustments but, there is no magic solution ! HMRC are going to monitor ANY company that claims to have a ‘new solution for the new era’ and will not hesitate to take that to court.

No Agency/end client will want to be associated with the bad press accompanying an HMRC investigation.


HMRC have also perceived that due to the new legislation, it may look a more tempting solution for a contractor/worker to move to a PSC.  Of course IR35 will then apply and the Contractor will need to be assessed to determine this.  No matter what anyone tells you, if a PSC is not suitable for you now, then it won’t be come April.  You don’t just suddenly become outside IR35 and, you would need to be to run a true PSC and claim expenses.  To this end, we have heard that HMRC are thinking of bringing in an IR35 test (ESI Test) that any PSC will have to complete before operating outside of IR35.  Just because you think you would be outside IR35 does not mean that will be the case !

A Note

We know that there are firms in our industry which offer compliance audits and unbiased advice.  These firms are operating without approval from HMRC because, at present, there is no such thing recognised by the government or an independent trade body.  Any company that advertises a ‘compliance audit’ for the purpose of making the contractor/agency feel more secure, is misleading.  It does not provide any level of protection for the contractor, the Agency or the end client.


So, we shall be awaiting the budget release before releasing the final result to our contractors/workers.  There is hope that maybe, just maybe, HMRC will recognise the impact this will have on the contracting industry as a whole for all parties involved.

In the meantime sit tight and we will update you as soon as we know what changes will be taking place.