IPSE: Govt must consider changes to relief carefully

Tuesday 24 March 2015

The Association of Independent Professionals and the Self Employed (IPSE) has advised the government to carefully consider changes to expenses rules announced during the Budget.

Chancellor George Osborne said in his Budget speech on March 18th that the government "would be clamping down on agencies and umbrella companies who abuse tax reliefs on travel and subsistence".

In particular, this proposal aims to target employment intermediaries that generally work as an employee, but claim to be a contractor, from claiming travel and subsistence relief. However, Mr Osborne did say that he also plans to protect those workers who are genuinely self-employed.

IPSE warned the government that they should exercise caution when bringing these new rules into effect.

Director of policy and external affairs at IPSE Simon McVicker said: "This Budget has generally been very favourable for the self-employed. Indeed George Osborne was careful to say that these new measures ‘would not impact the genuinely self-employed’.  However, we remain concerned that if this is not done correctly then independent professionals will be seriously affected.

"In particular, the new rules are likely to require those working through their own company to prove they are not under the ‘supervision, direction and control’ of their end client."

Mr McVicker added that IPSE hopes workers will not face an onerous or unfairly high burden of proof that they are not under supervision, direction and control of the end client. He said that IPSE is unsure about how this can be done in such a way that is fair, proportionate and easy to comply with.

Looking at the onshore rules that have come into effect, IPSE holds the belief that they have caused a lot of disruption and confusion to the marketplace for contractors.

Mr McVicker said that these points have already been put across to officials at HM Revenue and Customs (HMRC) and they also contacted IPSE when the Chancellor went to deliver his Budget today.

He took it as a sign that the government is serious about consulting with IPSE and explained that he plans to make sure the views of all members of IPSE are well represented.

Mr McVicker explained that he hopes to hear more from HMRC about how it intends to implement these measures and adds that IPSE will be responding when they are put forward for consultation.

Plans to change travel and subsistence relief have been looked at by a number of other groups with interest in this area.

Recruitment support service provider APSCo hopes that this restriction could prove to, in fact, be a positive step forward where travel and subsistence relief is concerned. Previously, the government has talked about scrapping this form of relief altogether but APSCo believes that the discourse in the Budget suggests that the government will, instead, take a line of action that is similar to IR35.

By Victoria McDonnell

Get in touch

Please select your type of enquiry:

Brookson on Twitter