The government is to push ahead with the removal of tax relief on travel & subsistence (T&S) expenses, according to Treasury documents accompanying today’s Budget.
The documents confirmed that tax relief will be removed from April 2016 for temporary workers supplied through employment intermediaries.
The government’s move was met with a mixed response.
Commenting on the government’s confirmation, Crichton Miller, chairman of driver recruitment business Haul-It Nationwide, said: “I am delighted.”
He continued: “Decent compliant agencies like mine struggled to compete with the hidden margins employed by the majority of agencies via umbrella companies and T&S schemes. Only extreme efficiency has allowed my business to survive over the last 19 years of trading against unfair competition.
“Now, we should have a level playing field and my workers’ wages will remain the same and our charges will not go up.”
But Crawford Temple, chief executive of PRISM, a trade body for service providers and payment intermediaries in the temporary labour market, said he was disappointed the Chancellor had not announced a strategic review of tax legislation affecting contractors.
“Our members are still unable to invest in the future with any certainty, and the country’s growing army of contractors will continue to suffer the worst of both worlds. They are treated as ’employees’ by the taxman despite identifying more with the self-employed in the way they choose to work. It is important to remember these are people with no job security, who lack the same access to support, benefits and pensions available to ordinary employees.”
Meanwhile Julia Kermode, CEO of the Freelancer & Contractor Services Association (FCSA), a trade association for umbrella, accountancy and payroll providers, said: “When T&S comes into effect there is no question that we will see a skills shortage, as fewer workers will be willing to travel for assignments.
“There will undoubtedly be a knock-on effect and government policies that are heavily reliant on contractors will be hit. The new plans for HS3, Crossrail, M62 widening, 18-mile trans-Pennine tunnel will suffer along with other current infrastructure projects which rely on contractors.”
– See more at: http://www.recruiter.co.uk/news/2016/03/budget-ts-tax-relief-removed-from-next-month/#sthash.62BWXc9L.dpuf