Schemes that operate at the moment allow part of employees’ pay, which would normally be subject to tax and NIC, to be replaced with expenses payments for travel The amendment means that expenses for travel to a temporary workplace and related subsistence costs can no longer form part of employees’ pay for national minimum wage purposes.
The amendment does not apply in relation to any pay reference period beginning before 1st January 2011.
Temporary workers paid at or near the National Minimum Wage (NMW) can participate in travel and subsistence schemes, operated by some employment businesses and umbrella companies. These are designed to provide tax and NICs savings while complying with NMW rules.
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