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Umbrella company’s reimbursed subsistence expenses were not deductible from workers’ earnings

By Mark McLaughlin, November 2024

Subsistence expenses reimbursed by umbrella company were not deductible from workers’ earnings as each workplace was a permanent one, and HMRC determinations and decisions were validly issued.  

The appellant ‘umbrella’ company (M) engaged temporary workers who supplied services to end users or clients. M did not enter into an agreement directly with end clients. Instead, the client entered into an agreement with an employment agency, which in turn entered into an agreement with M. M changed the contract it used to engage its workers on 6 April 2013. Its previous contract was used between 6 April 2010 and 5 April 2013.  

M reimbursed subsistence expenses to workers using round sum or benchmark scales and claimed that the reimbursements were deductible from workers’ earnings for income tax and National Insurance contributions (NICs) purposes. Broadly, such expenses were not deductible if they were expenses of

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