Bodies rally together to challenge contractor expenses ban

22nd January 2016 | News

Four professional bodies are coming together to appeal on behalf of businesses to demonstrate how the removal of travel and subsistence relief for contractors from April 2016 will affect them.

The Confederation of British Industry (CBI), the Recruitment & Employment Confederation (REC), the Chartered Institute of Personnel and Development (CIPD) and the Freelance and Contractor Services Association (FCSA) launched their campaign together this week.

The quartet have asked all PSC contractors and any business affected by the proposed removal of relief to complete their anonymous online survey.

The FCSA states that the aim of the survey is to compile evidence “so that we can present a case to Government,” who have “significantly underestimated” the impact of removing travel and subsistence relief for contractors.

Current forecasts indicate that some 750,000 professionals will be affected, with some expected to be up to £3,500 worse off per annum.

The businesses contractors currently work for will be worse off too, because in those instances where contractors live far away, “the Government expects businesses to pay a wage sufficient to attract them”.

This wage will be payable by the engager to the worker “without any special tax subsidy being necessary”, according to the Government.

Despite rising concerns among businesses and the threat of an “increasing cumulative burden” on engagers, the Government stated in its Finance Bill 2016 that the measure – designed to raise £505 million for the Treasury coffers – will only have a “negligible impact”.

Julia Kermode, of the FCSA, is urging people to complete the survey, which closes on February 3rd.

“We implore companies to tell us what the knock-on effect of the removal of T&S relief will mean for them,” said Kermode.

“They [end-users] don’t seem to realise that they will bear the additional costs and they will not have the skills they need at their disposal.”

The FCSA echoed as a whole: “The UK’s continued shortfall in productivity levels will be of major concern to UK employers and its workforce and the impact of removing Travel and Subsistence tax relief will exacerbate the situation.

“It seems that the Government is simply paying lip service when it claims to value the freelance workforce, otherwise it would not be going ahead with this legislation that will penalise this group of workers and the companies who benefit from their niche skills.

“There is no joined-up thinking in the government’s approach and the UK economy will suffer [as a result].”