Umbrella Company representative group PRISM has declared that it is more disappointed with what the Chancellor left out of last week’s Budget than with the measures he included.
The organisation has been lobbying tirelessly for a strategic review of the tax system with a particular emphasis on all of the legislation affecting contracting professionals, who do not fit into either of the two taxation categories the Government and HMRC currently recognises (employed or self-employed).
The body had also pressed for a rethink on the abolition of tax relief on the considerable travel and subsistence expenses incurred by flexible Umbrella Company Employees and other contracting workers, who typically travel far greater distances to and from their temporary workplaces than their permanent counterparts.
PRISM CEO Crawford Temple expressed disappointment that neither issue had registered with the Chancellor, who did not announce the hoped-for strategic review of legislation affecting contracting professionals, an omission that Temple described as a “huge missed opportunity.” Instead, the Chancellor is forcing the employment intermediary/Umbrella Company sector to “soldier on” in the absence of any clear recognition of the third major way in which many workers choose to be engaged in the modern UK: as contractors.
Temple said: “Our members are still unable to invest in the future with any certainty and the country’s growing army of contractors will continue to suffer the worst of both worlds. They are treated as ’employees’ by the taxman despite identifying more with the self-employed in the way they choose to work. It is important to remember these are people with no job security who lack the same access to support, benefits and pensions available to ordinary employees.”
PRISM, Mr Temple continued, had for that very reason been campaigning for a strategic review, an endeavour that succeeded in garnering cross-party support. Yet, he said, Mr Osborne had chosen to listen neither to MPs nor the contractors and employment intermediaries who will be affected by the changes to travel and subsistence tax relief. He charged the Chancellor with obstinately proceeding with the changes in the absence of any effort to take fuller account of the structures used by contemporary UK businesses to engage workers.
He went on to add that the likely effects of the Chancellor’s failure to heed cross-party and industry advice on the necessity for a strategic review would be an increase in costs for a range of public sector employers, as well as a reduction in the flexibility of the UK workforce.
The UK’s flexible workforce, he said, has been a key factor in helping the UK recover from recession and achieve growth ahead of other countries.