The pre budget report comment from Lawspeed

The pre budget report contained the welcome news that the government has decided not to change the tax reliefs on travel expenses, following the recent consultation.

Adrian Marlowe, of specialist consultancy Lawspeed which represented many umbrella companies within the consultation, said ìthis news will come as a huge relief not only to umbrella companies, but also to the large number of contractors for whom tax relief is a significant factor in accepting site based work. However this will not be the end of the matter as I am informed that the government will now set up a task force with greater emphasis on compliance and dispensationsî.

Lawspeed had represented the AEMC and various other companies in the industry. Adrian said ìwe are very grateful for the tremendous support that was provided for the representation. It goes to show the value in providing a cohesive and coordinated strategy, and I hope that this continues. However, it is entirely possible that economic factors played a part in the governmentís decision, and there is much more work to be done to help provide a level playing field and a suitable compliance structure that will be acceptable to HMRC. We look forward to working further with our clients, particularly the AEMC which has been set up specifically for that purpose, in order to achieve a good long term outcome.î

The AEMC also welcomed the decision. Adrian Learer, a director of the AEMC commented ìthe AEMC campaigned for precisely this result, but I urge that there should be no complacency. The reasons for the consultation in the first place should not be forgotten and a return to practices that the government clearly finds unacceptable could be disastrous for everyone in the industry in the long run.î

The AEMC now intends to further address government aims. Top of the list will be the issue of dispensations, which are understood to be a key area of concern for both government and umbrella companies.

There remains a link between compliance and the MSC legislation, which agencies should continue to be concerned about. For more information see www.lawspeed.com.

The AEMC is open to application to any umbrella company that employs its workforce. Benefits of membership include overcoming agency concerns about compliance and application of the Managed Service Company legislation. For more information see www.a-emc.co.uk or call 0845 1295119.

Lawspeed Limited
24th January 2008.