The Scottish National Party – the third largest political party in the House of Commons – has tabled an amendment to the Finance Bill in a move to bring about a long-awaited strategic review of the taxation system to gain recognition for contracting workers.
SNP Treasury spokesman Roger Mullin has drafted the amendment, which, if included in the Bill, will require the Chancellor to come back in six months with the findings of the review. The move follows discussions between Mr Mullin and Umbrella Company trade association PRISM, which has been pushing for the review for several months.
PRISM believes that the review is necessary to secure proper recognition for contracting workers, who cannot be accurately included in either of the two categories of work currently recognised – employment or self-employment.
The amendment reads: “The Chancellor of the Exchequer must conduct a strategic review of the impact on workers defined as providing services through intermediaries of their treatment for income tax purposes, including the differential impact on different types of worker, and must publish the report of the review within six months of the passing of this Act.”
During a debate on the Finance Bill on Monday evening, Mr Mullin detailed his opposition to the Chancellor’s abolition of tax relief on the considerable travel and subsistence (T&S) expenses incurred by contracting professionals, who typically travel appreciably longer distances than permanent employees to work in a series of temporary workplaces.
The Chancellor appears to have blithely disregarded this key characteristic of flexibility amongst contracting workers, who, as Mr Mullin also pointed out, lack the job security of permanent employees.
The abolition of relief will heavily impact contractors working in the oil and gas industry in Scotland, which is heavily reliant on their talents, as well as rural communities where these professionals often spend overnight stays en route to the rigs.
Welcoming the SNP amendment, PRISM Chief Executive Crawford Temple said that it was “fantastic” that Mr Mullin and his party colleagues had tabled the amendment.
He pointed out that Government had failed to keep up with the evolving nature of the way people work in the UK, which has been changing over many years. A key trend has been the rise of the flexible contracting workforce, which Mr Temple said was one of the best aspects of the country’s labour force and a key to the UK’s future economic strength.
He went on: “This third way of working cannot be ignored any longer. We cannot go on any more with a two-sizes-fit-all system when the country would benefit wholesale from the rules, laws and regulations being brought up to date to recognise the entrepreneurial strength of contractors.”