Concerns mount over travel & subsistence legislation
Early Day Motions (EDM’s) are used for reasons such as publicising the views of individual MPs, drawing attention to specific events or campaigns, and demonstrating the extent of parliamentary support for a particular cause or point of view. Although there is very little prospect of EDM’s being debated, many attract a great deal of public interest and frequently receive media coverage.
The full motion, primarily tabled by Sir Alan Meale, MP for Mansfield, states:
“That this House is aware that the Government has chosen to remove the tax relief mechanism Travel and Subsistence from contractors from April 2016, a decision which is likely to result in around 1.6 million workers experiencing up to a 20 per cent wage cut to their net salaries overnight; understands the importance of workers in this sector who currently fill the skills shortages around the country and in industries as hospitals, schools and colleges and local authorities as well as many major public civil engineering projects; and believes that if the Government persists in such a short-sighted fiscal strategy it will result in undoubted delays and huge failures to essential services provided to citizens.”
Back in July HMRC ran its consultation, ‘Employment Intermediaries and Tax Relief for Travel and Subsistence’, which proposed removing tax relief for travel and subsistence for workers engaged through employment intermediaries where they were subjected to supervision, direction or control of any person. Following the Autumn Statement however, it was announced that the restrictions would only apply to workers providing services through PSC’s where IR35 applies.
The relevant draft Finance Bill 2016 clause is to be published on 9th December 2015. Consultation on the draft legislation will run until 3rd February 2016.
At last! Some sensible action being taken by MPs. IR35 clarification next? Fed up with living in uncertainty
Can’t they see that if they go ahead with these restrictions it’s going to push up contractor rates to cover the shortfall? I’m working for a charity a long way from home, I cannot afford to continue working for them if this legislation goes ahead unless I up my daily rates, which would be unsustainable for the charity concerned.
It seems crazy to me that MPs can claim expenses indefinitely for attending their regular place of work in Westminster but contractors providing an invaluable peripatetic work force will not be able to meaning that working locally to keep the costs down will be the only way to continue contracting
If you’re looking for certainty John, declare yourself inside IR35 regardless, HTH
A significant number of contractors are in the final years of their career and want flexible working whilst maintaining an income. Quite often this flexibility allows them to care for elderly parents. If contracting becomes unviable the government will have increased costs in other areas, such as the NHS and benefits.
IR35 clarification could be simple; change S, D or C to S, D and C. Either that or look at the rights of a permanent employee and see which apply to a given contract; if less than, say, 20% apply, then you’re outside IR35.
My role involves working at different hospitals in and around UK which can only be claimed through contractor travel expenses. Every day I travel to a different location (London to Leeds, London to Wales) etc and the tickets are not cheap. Also since I have to leave home early in the morning, I have to have food outside. Most of my work is for charities and I don’t get high contract rates. If travel and subsistence is cut, then contracting will no longer be viable.
I do freelance work at Heathrow Airport and the permanent employees who work for the construction companies here get paid travel expenses for the additional journeys from their registered office to the airport (as the airport offices are owned by Heathrow). Why should then this be different for a contract employee who works away from his registered office?
Is this another attempt to kill off the contracting industry (like IR35)? Contractors offer flexibility to clients and can meet a short term need.
It is ridiculous to expect anyone to meet their own work travel and accommodation bills out of their net wages. If BT send an employee to a remote site does he have to pay his own expenses? Course not – one rule for some, another rule for others.