Four major industry bodies have joined forces to oppose the planned abolition of Travel and Subsistence (T&S) tax relief in April this year.

The Confederation of British Industry (CBI), the Chartered Institute of Professional Development (CIPD), the Recruitment and Employment Confederation (REC) and the Freelancer & Contractor Services Association (FCSA) are asking businesses to help them to collect evidence on the impact this development will have on them.

Respondents have until 29th January to complete a survey, which can be found by clicking here.

From April, an estimated 750,000 workers will be affected, including numerous Umbrella Company Employees. Most will see their income plummet by at least £3,500 per annum if the change goes ahead.

With the government maintaining that employers should pay these workers a sufficient wage rather than attracting them with tax reliefs, the CBI, CIPD, REC and FCSA believe that the pressure on businesses to meet the costs will be immense.

Fewer workers will be willing to travel to assignments, the four groups predict, with the result that a significant skills shortage will be created. The result will inevitably be higher assignment rates to attract the necessary workers for temporary project needs. Freelancers and contractors will be forced to increase their rates to compensate for the loss of T&S relief.

The survey is due to be presented to the government by 3rd February.

FCSA CEO Julia Kermode said: “We implore companies to tell us what the knock-on effect of the removal of T&S relief will mean for them – they don’t seem to realise that they will bear the additional costs and they will not have the skills they need at their disposal.”

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