The news will be welcomed by construction unions who are campaigning against the use of umbrella agencies in the industry.
The Budget said: “Autumn Statement 2014 announced that the government would review the growing use of overarching contracts of employment that allow some temporary workers and their employers to benefit from tax relief for home-to-work travel expenses, relief not generally available to other workers.
“This is unfair. As a result of the review, the government will change the rules to restrict travel and subsistence relief for workers engaged through an employment intermediary, such as an umbrella company or a personal service company, and under the supervision, direction and control of the end-user.
“This will take effect from April 2016 following a consultation on the detail of the changes. It will level the playing field between employment businesses that seek to lower their costs by using these arrangements and those that do not.”
Construction union UCATT general secretary Steve Murphy said: “While we welcome any consultation examining the operation of Umbrella Companies in our industry, what is really needed is for these companies to be outlawed and driven out of the construction industry as they only exist to exploit building workers for their own profit.”