Travel expenses for the low-paid – time for a rethink?
In view of financial pressures on low-paid agency workers, it is unsurprising that they are drawn to ‘umbrella’ arrangements which give them some tax relief on their travel expenses and increase their take home pay. This report looks at how concerns about the use of ‘traditional’ umbrella arrangements by low-paid agency workers resulted in the birth of ‘Pay Day by Pay Day’ (PDPD) schemes.
HMRC’s view is that PDPD schemes do ‘not comply with the Taxes Acts or Social Security Acts’ – yet our research indicates the schemes are still widely in operation. We explore why this might be and look at the potential consequences for workers who find themselves in a PDPD scheme – as evidenced by case studies provided by TaxAid.
Finally we make some recommendations – for example that the authorities tackle the immediate, unsatisfactory situation regarding PDPD, but also take a holistic look at what is driving workers to use these schemes in the first place.
Read the full report.