Tax grab could cut contractor payAtlantic Umbrella

8 October 2015 Category Contracting News
8 October 2015, Comments 0

Ministers are planning a multi-million pound tax grab that could have a substantial impact on the take home pay rate for millions of temporary workers in the UK, according to trade body PRISM.

HM Revenue & Customs is planning to scrap the majority of travel expenses for the flexible workforce next year in a move that could net the government around £265m and result in a staggering £7bn bill for UK employers.

PRISM, which was formed to highlight and support flexible workers, claims that the new plans, which could come into effect from April 2016, go too far. Contractors will not be able to claim travel and subsistence expenses if someone they work with is able to ‘Supervise, Direct or Control’ how they work at temporary work places.

Prism CEO Crawford Temple said: “The taxman is going to war on temporary workers and contractors. These are people for whom there is no normal commute as they move around different workplaces, sometimes working for dozens of companies a year over a wide area.”

He added: “These workers have always been able to rely on claiming travel expenses from home to temporary workplaces and that has been one of the few benefits of being a contractor.”

Mr Temple said the changes would mean that the most flexible part of the workforce would become the “worst off” and would also have less benefits and protection. Further research by PRISM suggests that employers would have to spend 25% more to maintain take-home pay rates.