Autumn Statement 2015
Today, the Chancellor, George Osborne will deliver his Autumn Statement to the House of Commons and in the detail of the statement will be a summary of the Government’s intentions on contracting in the UK.
Travel and Subsistence
It has already been made clear that there is an intention within Government to remove or restrict contractors’ entitlement to receive tax relief on their travel and subsistence expenses. This is a move that will see contractors working via Umbrella companies and Limited companies considerably worse off.
One Month rule
In addition there have been unconfirmed reports that HMRC are considering forcing workers who are on contracts for more than one month in duration onto their client’s payroll. This would have the effect of potentially killing off contracting in the UK as no contractor would want to be forced onto their clients payroll and give up the freedom that their decision to be a freelancer gives them.
Why are they planning these changes?
The Chancellor has stated that these decisions are being made to “level the playing field” for workers in the UK. There is a perception that it is unfair that one person should be able to claim tax relief where another person doing the same job can not.
It has also been claimed that these moves would also bring in around £265million per annum in additional revenue to the Exchequer – a figure that is generally derided as nonsense.
There has been abuse of the expense rules, especially by companies that are at the lower paid end of the umbrella market. Various schemes have been exploited and many have technically contravened National Minimum Wage legislation and have even taken away employment rights from workers. One positive of these proposals is that it would kill these schemes off overnight.
Watch and wait
There has been a lot of second guessing in the staffing industry with plenty of doom and gloom predictions. There have also been suggestions that the legislation may be altered to ensure that genuine contractors are not badly affected.
We will be keeping a close eye on the proceedings today and we hope that the Chancellor has seen sense and will bring in the much needed regulation without destroying the flexible work force that the UK is justly proud.
Some sources to learn more