W/C April 18th - Nova are currently sending out P60s. If you receive one, please keep it for your records.
CHANGES TO EXPENSES LEGISLATION FROM FRIDAY 8TH APRIL
You might be aware that in 2015 HMRC and HM Treasury consulted with our industry and employment agencies about restricting allowable expenses for travel and subsistence. Further to this consultation, they decided to bring these measures in and it is with regret that we have to inform you that they come into force from next Wednesday 6th April.
In the lead up to the publication of the Finance Bill last Thursday, everything had pointed to the fact that if you operate like you do as a Personal Service Company (PSC) you were not going to be caught by the new expenses rules and you would be able to make your claims as usual.
However, last minute changes were made which were not expected. Since then we have been carefully studying the wording and consulting our tax advisers and we are pleased to advise you that the changes don’t have the negative impact that many were expecting.
Things have changed though, so from April 6th, as a PSC worker subcontracted by Nova, if you wish to claim mileage expenses, you have to prove that you're not under supervision, direction or control (SDC), or the right to supervision, direction or control.
The good news is that the new rules only cover travel and subsistence to and from your workplace. You can still claim for the cost of meals incurred whilst on the road and other expenses such as PPE and necessary expenses incurred in the performance of your duties.
Also, if you can provide us with reasonable evidence that you're not under supervision, direction or control, then you can still claim the mileage as before. That evidence would need to come from you or your recruitment agency, or the end client and if your agency is willing to provide this confirmation, it is vital for them to check all contracts in the chain to ensure there is no SDC clause.
Will I be worse off?
We have some good news to give you here. The new tax year starts next Wednesday on April 6th which means the directors Annual Earnings Period (AEP) resets with the result that you will pay no National Insurance Contributions (NICs) at all until your taxable earnings reach approximately £8,060. So, from next Friday it’s highly likely that you will in fact be better off even if you submit no expenses at all.
Please do not hesitate to contact us if you have any questions or concerns on this issue, but we hope the following is a helpful guide on the changes:
- PSCs subcontracted by Nova are affected by the changes and therefore mileage claims to and from home and the worksite are no longer allowable unless you provide us with a document which states there is no SDC anywhere else in the chain or any SDC in practice.
- All other allowable expenses such as receipted subsistence incurred once you have left the worksite for the day remain allowable.
- The new tax year means the new Directors AEP. In all but the cases where the travel expenses are the highest, you will for the next 18-20 weeks see an increase in pay compared to what you have received recently.
- We are working hard to see what other options are available and are confident that we will be able to offer you a long term solution which continues to provide you a benefit to providing your services in this manner.
Don’t forget, there’s still a big benefit to working through Nova!
If you have any questions whatsoever, please don’t hesitate to contact us.
Nova Business Support for CIS Tradesmen
Making the transition from being employed to self-employed and working for yourself can be a daunting process and for some being self-employed may be your first experience of work.
Not only will Nova CIS deal with your payrolls and forward your payment advice slips for your records but Nova Business Support can deal with all your tax affairs and carry out your year-end Self Assessment forms.
This form is used to state taxable income and to reclaim your expenses but more importantly these expenses can be claimed as a deduction from your gross income before CIS deductions are applied.
HMRC uses the information on your tax return to work out your tax bill and whether you are due a CIS tax rebate.
Nova Business Support is happy to deal with this administrative burden allowing you to focus on your real job.
For an extremely competitive fee Nova Business Support will process all your expenses that you send to us in order that we can complete your Self Assessment form by 31st January of each year.
Allowable expenses include:
- Loose tools and materials
- Personal protective equipment such as high visibility jackets, steel toe caps and hard hats
- Use of your home as an office
- Secretarial expenses
- Nova Business Support fees
- Rent when working away from the normal place of business
- Telephone – mobile and use of home
- Printing, postage and stationery
Nova Business Support will require receipts for all your expenses by 30th November of each year as we cannot guarantee that your tax return will be completed by January 31st the following year if this deadline is not met.
Should you have any questions or need further information or clarification on these points then please call the Nova CIS helpline on 0113 887 4757.
We look forward to you being another of our valued customers.