The 2015 Autumn Statement was delivered by Chancellor George Osborne yesterday, but the latest report provided as many questions as answers, despite expectations that it would finally bring closure to various consultations relating to the recruitment sector and controversial travel and subsistence changes.
The Summer Budget 2015 revealed proposals to restrict tax relief for T&S for contractors engaged through an employment intermediary, and following consultation, professionals working through personal service companies where the legislation applies will have their access to travel expenses restricted from 6th April 2016.
The government also has concerns about the increasing use of salary sacrifice arrangements and is currently considering whether any action is required. It has set out plans to gather further evidence from a range of sources, including employers, in order to inform its approach to these arrangements moving forward.
Tax avoidance remains a top priority, with the government intending to take action against those who have not paid their fair share of tax, with a particular focus on disguised remuneration schemes. Further legislation in a future Finance Bill is currently being considered to close down new schemes with effect from 25th November 2015.
The Statement also confirmed that the government has responded to the Office of Tax Simplification (OTS) review of employment status and is taking forward the majority of recommendations from the final report.
Further details that will offer clarity on a range of these issues could come to light during the next few days, but we do know that changes outlined in the Finance Bill regarding how umbrella companies operate will be operational by spring next year. These changes will ensure that flexible workers will be able to claim for the business expenses they incur, and both agencies and contractors will be protected.