FCSA is urging MPs to show their support for contractors by using the Summer Budget as an opportunity to redress errors made in the March Finance Act. In a late change to draft wording earlier this year, the legislation was amended, without consultation, to specifically encompass contractors working through an umbrella firm.
As a result, from April 2016, these contractors will no longer be able to claim their properly incurred tax relief on travel & subsistence expenses at source and instead they will have to wait many months in order to claim via a self-assessment tax return.
FCSA’s CEO Julia Kermode said: “There does not appear to be any rationale or justification for delaying the receipt of umbrella employees’ tax relief entitlement. It is unforgiveable to knowingly introduce legislation that will reduce income for a specific element of the workforce; this is not affordable for anyone’s personal circumstances, particularly not in the current climate.”
Due to the pre-election build up, there were only two days from the publication of the legislation to it becoming enacted, so there was no opportunity for affected parties to influence the legislative process at that stage.
Kermode continued: “As CEO for the sector’s trade association, I cannot risk reputational damage to umbrellas next year when their employees receive less income from April 2016, despite undertaking the same work. Campaigning for a change in legislation is a bold and ambitious move, and this second budget gives us an opportunity that we simply must grab.