Tax Avoidance

HM Treasury written question – answered at on 17 December 2014.

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Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Treasury)

To ask Mr Chancellor of the Exchequer, with reference to the table on page 65 of the Autumn Statement 2014, what proportion of the revenue associated with the income tax: salary sacrifice and expenses including umbrella companies measure he plans will result from reforms to legislation related to umbrella companies in (a) 2014-15, (b) 2015-16, (c) 2016-17, (d) 2017-18, (e) 2018-19 and (f) 2019-20.

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

The yield from the measure referred to (income tax: salary sacrifice and expenses including umbrella companies) relates to the introduction of a new exemption for qualifying expenses which cannot be used in conjunction with salary sacrifice. This follows a recommendation from the Office of Tax Simplification and a consultation undertaken by HMRC over the summer. Draft legislation for this measure was published on 10th December. The decision to prevent the exemption from being used alongside salary sacrifice schemes will prevent tax loss from employers (including umbrella companies).

The Government will shortly be publishing a discussion document specifically reviewing the use of overarching contracts used by umbrella companies and is separate from the measure referred to above.

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