Chancellor George Osborne has been accused of betrayal by campaigners for T&S after he unveiled severe cuts to contractor expenses in his 2015 autumn statement on Wednesday.
As expected, Mr Osborne confirmed that he would be pressing ahead with plans to prevent hardworking flexible workers having access to travel relief. This means that from April 2016 contractors under the supervision, direction and control of their client will not be able to claim travel expenses.
This is despite the fact that trade body PRISM recently revealed the potentially devastating effect this could have on the economy, with research showing that employers could be forced to foot a multi-billion pound bill, skills shortages could worsen, and contractors will see their take home pay cut drastically overnight.
PRSIM’s own Yes2T&S Campaign highlighted the fact that public services in particular could be stretched, as increased wage bills are likely to create overwhelming pressure on budgets. A separate report showed that the government’s central administration has failed to properly assess the impact and risks of the legislation.
PRISM CEO Crawford Temple said: “Clearly we are disappointed by the announcement and the fact that the government has failed to listen to the concerns raised by pressing ahead with this proposal.”
He continued: “The government is walking blindly up an avenue that will net them relatively small sums, £265m by HMRC’s own reckoning, but cost stretched employers billions and penalise the most flexible workers supporting schools, hospitals and crucial huge public projects.”