CHANCELLOR STANDS FIRM ON CONSTRUCTION WORKERS' TAX WHAMMY

blog header image

Posted : 14 Mar 2016 at 16:30:03
Category: News

Share this article

The chancellor made a U-turn on controversial cuts to tax credits but there was no reversal of plans to scrap tax relief on travel and subsistence expenses for freelance workers

Tax changes next April will cost self-employed workers an average of £200 a week each Above: Tax changes next April will cost self-employed workers an average of £200 a week each And this means a likely pay cut next year for all those construction workers who are either genuinely self-employed or technically employed by umbrella companies

Research by umbrella firm Danbro suggests the move could cost each freelancer an average of £200 a week when tax relief is scrapped in April 2016

Danbro managing director Damian Broughton said: “The chancellor started by saying this was a budget that would deliver what businesses need – competitive taxes

The reality is that he’s raided the pockets of contractors and businesses alike with a cynical stealth tax

“This move could have a potentially devastating effect on some businesses that rely on freelance workers to provide the skills they need

If they want contractors to come to their site they will have to pay much more – many won’t have the capacity to do that

“The chancellor also heralded the growth we’ve seen in the UK economy over recent years

That growth was fuelled by our flexible workforce and he’s now putting the brakes on this vital sector by stopping them from travelling to where they are needed

” The decision to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company will raise just £265m for the Treasury, Mr Broughton said

Mr Broughton added: “While the autumn statement brought good news for contractors in the shape of numerous infrastructure and building projects, this short-sighted tax grab will hit the temporary worker sector hard

“The chancellor repeatedly claimed ‘we are the builders’, but without a strong flexible workforce we won’t be able to build anything

” Controversy creates unlikely bedfellows: construction union Ucatt has been waging a strident campaign against umbrella companies for the fees that they charge, but is with full agreement with Damian Broughton on this one

Ucatt acting general secretary Brian Rye said: “This is a kick in the teeth for workers who are already losing thousands of pounds a year by being forced to work via an umbrella company

” He said that expenses form a legitimate part of construction workers’ take home pay as they recompense them for having to travel to temporary sites and often have to work away from home

Ucatt believes that legitimate expenses should be paid on top of wages and not used to bulk out wages

Mr Rye added: “This is effectively a pay cut and means that construction workers will be unable to make ends meet or afford life’s extras which are often the only recompense for working long hours in a hard unforgiving environment”

LATEST SIMILAR NEWS

HMRC HITS CATERPILLAR FOR £37M
Posted on: 02 Dec 2019 at 10:04:49
The UK tax authorities have clamped down on Caterpillar’s tax avoidance methods in the UK and billed it for £37.5m.Haul truck made by Caterpillar in the UK using globally source componentsThe tax demand followed a review by HM Revenue & Customs of Caterpillar’s transfer pricing agreements....
CV FOR SELF-EMPLOYED OUTSIDE OF IR35
Posted on: 28 Nov 2019 at 07:27:57
Making sure that your CV and online presence is adjusted for IR35 as of April 2020 is essential.So what does a post-IR35 reform CV look like? And what steps should Limited Company Contractors take now to get their primary work-seeking paperwork reflective of their genuinely self-employed status?CV,...
EMPLOYER CONFIDENCE IN THE UK ECONOMY DROPPED FURTHER IN THE RUN-UP TO THE GENERAL ELECTION, TO A NET FIGURE OF -34.
Posted on: 27 Nov 2019 at 12:35:39
ARE THE 5 MILLION SELF-EMPLOYED WORKERS SEEN AS AN IMPORTANT PART OF THE ELECTORATE?
Posted on: 26 Nov 2019 at 18:31:31
Following on from Boris Johnson unveiling the Conservative manifesto on (24/11/19) and the Liberal Democrats announcing theirs (20/11/19), it appears the 5 million votes of the self-employed are being viewed as an important section of the electorate.Julia Kermode, chief executive of The Freelancer &...
FLEXIBLE WORKERS AND WHAT MOTIVATES THEM TO CONTRACT OR TEMP
Posted on: 22 Nov 2019 at 12:24:36
KEY FINDINGS Flexibility and good work go hand in hand. Understanding motivators for individuals and businesses is key to maintaining and enhancing two-way flexibility that benefits all parties. Here are some core messages from our research: } Flexible work is the new normal – two in five people in...
FLEXIBILITY WORKS: WHY PEOPLE CHOOSE FLEXIBLE WORK
Posted on: 22 Nov 2019 at 12:13:32
Flexibility works: Why people choose flexible workGood work and flexibility go hand in handThe world of work is evolving, but flexible work has remained a significant and steady feature of the UK labour market. On any given day recruiters place over a million people into temporary and contract assig...