Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 6 September 2021 to Question 40978 on Off-Payroll Working, what assessment his Department has made of the potential merits of reforming the taxation system to allow personal service companies (PSC) to claim tax relief for (a) commuting costs and (b) other expenses incurred by a contractor working through that PSC and who pays (i) Employers' National Insurance, (ii) Employees' National Insurance and (iii) the Apprenticeship Levy.
Where a contractor works through their own Personal Service Company and is within the off-payroll working rules, they can claim tax relief on expenses, including overnight stays and business travel away from their usual place of work, in the same way as those employed directly.
Such contractors can also claim tax relief on expenses, including equipment, tools, and professional fees in the same way as those employed directly.
Where someone is working within the off-payroll working rules, the deemed employer is responsible for paying Employer National Insurance Contributions (NICs) and the Apprenticeship Levy. These costs should not be paid from the contractor’s gross pay, from which the deemed employer will deduct Income Tax and Employee NICs.