Chancellor George Osborne has been warned against introducing plans to clamp down on individuals working through personal service companies (PSC) in his autumn statement 2015, as this would risk a revolt from parliamentary colleagues according to the FCSA.
Speculation over the weekend indicated that the government was seriously considering introducing a new ‘one-month-then-payroll’ measure that would force individuals working for a single client for over a month to go on the payroll, which would affect around 90% of contractors and freelancers.
The Daily Mail claims the measure could be announced in the autumn statement later this month with the aim of raising an estimated £400m each year.
The Freelancer & Contractor Services Associations (FCSA) has claimed that these plans would be challenged by Osborne’s own colleagues and the employers’ group CBI if the clause is unveiled on 25th November.
FCSA chairman Julia Kermode said: “There are some 4.6 million self-employed workers in the UK who will have to go on the payroll of each of the clients they work for after a month if this [reported] legislation comes into force. That is a huge administrative burden for UK plc who will suddenly find themselves having to deal with a significant amount of workers on the payroll.”
The Association of Independent Professionals and the Self-Employed (IPSE) responded with dismay to the potential law changes and has confirmed that it is now urgently trying to clarify whether a cap on contracting is now “under serious consideration”. IPSE chief executive Chris Bryce added that the plans would “cause untold damage to the flexible economy.”