APSCo has provided a more detailed response to the Government’s draft legislation and preliminary guidance on travel and subsistence (T&S).
Virtually all parties responding to the consultation regarding this legislation warned that the “Supervision, Direction or Control” (SDC) test proposed by HMRC could be used to catch all workers, even in circumstances where there is no SDC: a client will always have the right to say, “Create a website for my business” or “Build a wall there”, both of which would be deemed “direction” under the test. APSCo is calling for HMRC to clarify or change its test over the coming weeks.
Although further guidance has been promised, fears are growing that HMRC will leave the wording deliberately vague to allow themselves more room for manoeuvre later. However, this plunges taxpayers and businesses into uncertainty, APSCo argues, resulting in some adopting a “no risk” stance and refusing T&S outright.
APSCo also questions Government assumptions that the measures will have no significant economic impact, stating: “… as the biggest user of temporary labour, does the Government intend to compensate those working in the public sector for their loss, or more likely, does the Government expect individual workers to bear the cost?”
Based on even the most conservative estimates, APSCo estimates that the real cost of the measures will run in the billions.
The organisation believes, however, that Umbrella Companies will continue as they provide too valuable a service to both contracting professionals (payment, continuous employment, support and statutory benefits) and agencies (HR support, payment processing and insurance). In certain circumstances, APSCo says, “T&S will continue to be available if all parties in the contractual chain agree.”