Two-thirds of contractors believe they should be paid more by employers if they suffer from Chancellor George Osborne’s plans to cut travel and subsistence (T&S) relief, new research by trade body PRISM reveals.
PRISM quizzed the flexible workforce about its attitudes towards the pending legislation, which could be announced in the 2015 autumn statement and come into force in spring next year.
A huge 65% of professionals said they expected a pay increase to offset the losses of not being able to claim travel costs, while 62% said they would be less likely to take on work that would involve lengthy train journeys and overnight stays.
The majority of freelancers surveyed said they would reconsider their position if they were not compensated in some way for the clampdown.
The study supports fears that employers could be left counting the cost of the legislation, which could result in a shortfall of around £7bn. The law changes could also result in more skills shortages in sectors such as education, where the lack of supply teachers could worsen the recruitment crisis.
Under the new proposals contractors deemed to be under the supervision, direction or control (SDC) of someone they work with will not be able to claim T&S. Only 18% of flexible workers said they were confident that they would not be caught by SDC.
PRISM CEO Crawford Temple said: “Contractors tell us they are just not going to stand for this stealth tax and won’t be carrying on regardless. The alternative is employers pay more, all because of a vague test which is not fit for purpose and takes vital expenses away from those who really need them.”