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”

SIMILAR NEWS

blog header image
NEWS
LANDLORDS NEED TO BE PREPARED FOR EVERY POSSIBILITY WITH CGT CHANGES – YOUNG

The age-old question posed by all private sector landlords at any one time is often, ‘what do I do next?’ For most, the answer is staring them in the face, and that continues to hold ...

blog header image
NEWS
TIGHTER SELF-EMPLOYED AND AFFORDABILITY RULES HERE ‘FOR SOME TIME’ – HSBC

Tighter self-employed and affordability rules here ‘for some time’ – HSBC Tightened self-employed lending criteria and affordability rules are seen across the mortgage market since ...

blog header image
NEWS
SNITCHES GET RICHES: HMRC PAYMENTS TO TAX EVASION WHISTLEBLOWERS UP 63% IN 2019/20

HMRC reported a 63% increase in payments to whistleblowers for reporting tax evasion in the 2019/2020 tax year, paying £473,000 to informants during the period.  In the previous tax year HM ...

blog header image
NEWS
LEE MARLEY OPENS LEEDS OFFICE

Lee Marley Brickwork Ltd has appointed Mike Hampton as commercial director to head up its new regional office in Leeds. Leeds becomes the fourth regional operation of Lee Marley Brickwork (LMB), join ...

blog header image
NEWS
SELF-EMPLOYED TREATED AS ‘SECOND-CLASS’ BY SOME LENDERS, BROKERS SAY

Self-employed workers are being treated like ‘second-class citizens’ by some mortgage lenders, as two-tier systems and punitive criteria leave these applicants severely disadvantaged, brok ...

blog header image
NEWS
RECRUITING PEOPLE FROM OUTSIDE THE UK FROM 1 JANUARY 2021

From 1 January 2021, freedom of movement between the UK and EU will end and the UK will introduce an immigration system that will treat all applicants equally, regardless of where they come from. Anyo ...

business-directory Business Directory
smartbusinessdirectory Payroll Services Business Directory
truebusinessdirectory payroll-services Directory
payroll-services Directory