Travel Tax Relief restrictions to affect UK freelancers

Up to 45,000 UK freelancers could be negatively affected by restrictions on tax relief for work travel if the UK Government proceeds as planned, according to The Association of Independent Professionals and Self-Employed (IPSE).

Proposed changes include the abolition of home-to-work travel and subsistence tax relief for some workers.

Detailed plans

Those freelancers employed through an employment intermediary who are supervised, directed, or controlled by any other person could be affected and finding themselves out of pocket.

A consultation document from HM Revenue and Customs (HMRC) has laid out the thinking behind the proposed changes. "These proposals are part of a strategic approach to clarify the differences between employment and self-employment, and the use of employment intermediaries. [They] will ensure those who are in an employment relationship are taxed as employees, on a fair and consistent basis," the document explains.

Concerns

Chris Bryce, IPSE Chief Executive, said that his organisation has "been flooded" with emails from freelancers who are concerned about tax relief on travel and subsistence being removed.

IPSE data suggests that 17% of UK freelancers using limited companies would go out of business if the new restrictions come into force. An overall 85% of respondents to IPSE questions said they would be forced to increase their charges to compensate for the losses, and 76% of business owners who answered said that they were worried about not being able to take on work that is not near to their home or office.