Mon 14th Dec 2015
The autumn statement did not deliver the fatal blow as anticipated by many industry experts, however contractors are warned not to get too complacent. The battle is not yet over. Whilst there was little mention of IR35 or personal service companies, the amendments due in April could still have wide-rangeing impact.
The autumn statement merely confirmed the desire to close to options for PSC using the travel & subsistence tax relief. Under current proposals from April 2016 contractors working through an agency no longer be able to claim travel and subsistence expenses, once the current proposal passes into law.
APSCo commented: “The lack of an announcement in the Autumn Statement doesn’t mean that the government won’t go forward with this proposal in the future, but it does almost certainly mean that it won’t come into effect in April, 2016, which is what we feared.”
The IR35 discussion continues, with the HRMC still considering responses to their announcement. With a desire to ensure fairness runs through -out the system without putting individuals or businesses at an increased burden.
But to Qdos Consulting, an employment status firm, the government’s wording in the AS suggests that ‘SDC’ is the favourite to reform IR35.: “[Although] Autumn Statement certainly wasn’t the bloodbath many were expecting… the fact that clause 3.20 doesn’t refer to ‘supervision, direction or control’ – whereas the T&S consultation did - could infer that HMRC are indeed planning on using ‘SDC’ for IR35 too.”
Referring to the T&S restriction, Julia Kermode, chair of the Freelancer & Contractor Services Association, said “Although [this is a welcome clarification] we note that further change on the employment intermediaries legislation is [to] come following Mr Osborne’s statement that he will look into ‘disguised remuneration’.”
In line with her warning, AS chapter 3.87 says the government intends to “take action against those who have used or continue to use disguised remuneration schemes and who have not yet paid their fair share of tax. “
If you have any questions about how this affects you one of our team would be happy to talk through your options.