Government legislation to deny Travel & Subsistence tax relief for contractors and freelancers will have a significant impact on British business and the very many companies which rely on the flexible workforce for its expertise and skills. This warning is issued from The Freelancer & Contractor Services Association (FCSA), the UK’s leading independent trade body for umbrella employers and accountancy service providers supporting the flexible workforce. For the past 18 months, FCSA has been campaigning on behalf of contractors, recruiters and end-hirers to ensure the policy does not become law.
FCSA is keen to point out to end-hirers in UK plc that if the legislation goes ahead there will be fewer workers willing to travel to assignments which will, in turn, create a skills shortage. This will undoubtedly lead to higher assignment rates to attract the appropriate workers to fulfil the temporary need of a project and contractors and freelancers will be forced to increase their rates to take the travel and subsistence costs into account.
Julia Kermode, CEO of the FCSA said: “If the Government goes ahead with its plans to abolish T&S tax relief UK plc will suffer; businesses will have less expertise at its disposal and will have to pay more for those skills which they currently rely on so heavily to fill a specific need. I think the impact needs spelling out and companies need to know what the knock-on effect of the removal of T&S relief will mean for them – they will be footing the bill. I would urge businesses to get on board to support us and the contractors upon whom they rely so much.”
Recent statistics published by the ONS revealed that UK productivity in 2014 was 20 percentage points below average compared to other major G7 economies. Julia Kermode added: “The UK’s continued shortfall in productivity levels will be of major concern to UK employers and its workforce. An organisation’s ability to be flexible and agile – already acknowledged to have been vital to the UK’s resilience within the downturn and recovery to date – must be of paramount importance to UK plc. So, I simply cannot understand why the Chancellor wants to penalise the very workers and the companies that hire them by removing T&S tax relief.”