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Speculation surrounding recent Travel & Subsistence allegations

Speculation surrounding recent Travel & Subsistence allegations

Exactly what are you, or your current providers doing? Asks EpayMe.

There have been a number of articles and announcements over the past couple of weeks regarding the &pound390m investigation from HMRC in relation to suspicious travel and subsistence schemes.

We felt it only right, as a trusted and transparent provider within this space to highlight the facts, as we are being asked questions like “are we at risk?”

The simple answer is if you are using us, then we do NOT operate these types of schemes, however, there are a number of agencies running in-house PAYE regimes and a select number of payroll providers with a & lsquo;twist’ on what you can really provide.

If an agency or provider operates ethically and pays a contract worker a rate to which they are also seeing as a gross pay regardless of any indirect or direct expense & lsquo;contribution’ then you are likely to be on a suitable scheme.

What is actually happening in many cases, the contract worker may be offered a placement on a short (or long) term contract and agreed to earn a salary of &pound500 (40 hours at &pound12.50 per hour) yet they may receive a direct expense value of &pound200.

The tax avoidance issues in question are surrounding the direct expenses not being subject to TAX/ENI/ERNI,hence the worker may receive &pound300 gross (40 x &pound7.50 per hour which is subject to TAX) and &pound200 direct expenses to achieve the &pound500 agreed. This is avoiding TAX on income earned, Employees National Insurance (ENI) and Employers National Insurance (ERNI).

If you would like more details on this, or fear you may be subject to these schemes, please do not hesitate to contact us immediately on 0800 622 6119


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