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Contractor T&S Survey Responses
Budget 2015: Changes to legislation affecting T&S (Travel and Subsistence) Expenses for contractors working through Umbrella Companies and PSC's.
We want the contractors' voices to be heard so that the Government and HMRC gain a full understanding of the sector and the integral role that contractors play in keeping the economy moving in the right direction.
So what do the contractors think so far? Let's take a look at some of the responses to date...
So what do the contractors think so far? Let's take a look at some of the responses to date...
If the T&S expenses were withdrawn it would lead me to not look for contracts which are based in a separate part of the country from where I live. The expense of having to stay away from home but receive no tax relief on those expenses would be too much income to lose. This can't be good for either myself or for the end clients who may be desperate to get the experience that contractors provide with their services.
James - IT Contractor
I am currently contracted for a government department who can not get enough technical resources locally. So 70% of the technical personnel are from a minimum of 50 miles away. Permanent employees get their expenses including hotel bills paid directly from the government. Contractors have to pay their own expenses from their rate. If this law comes into being then government departments and other public sector bodies will have insufficient technical resources as people will not commute daily or weekly.
Olly - IT Contractor
I travel all over the country to take up contracts, despite the fact that I live in Cheshire. I cannot move because both my wife and daughter have ME and that kind of upheaval would be disastrous to their health. I spent 15 months working for a client in Scotland. That client could not source the people locally to meet their contractual obligations with their client. They therefore had to identify contractors from all over the UK to fill the gap. With a 500 mile round trip, meals and accommodation, most contractors, myself included, would not be able to fill these roles as the costs and taxes would be uneconomical.
I believe that I would be outside of the direction and control aspects of the proposal, but quite frankly the lack of certainty would prevent me from taking the chance. Perhaps the playing field should be leveled to include MPs who are not, in my opinion, self employed, but are allowed to claim expenses for travel well above those allowed for mere contractors.
Geoff - IT Contractor
Restriction on the ability to obtain tax relief on travel, secondary accommodation and subsistence are going to have a crippling effect on my earnings obtained from working as a locum for the NHS. Not being able to reduce my costs associated with working all over the UK for different NHS trusts during the financial year will make my availability for work greatly reduced, as I will be forced to cut down on my travel expenses meaning that I will only be able to work locally to my current home.
This is not good for me, but also for the employers looking to attract candidates to more distant locations across the UK. No tax relief will only punish the actual temporary contractors, who will have their earnings reduced and might stop locuming all together. This will put an additional strain on the employers struggling to fill short-term posts. The ever-rising costs of living make every job less worth-while, when the salaries are not being increased or when the tax relief options are being reduced.
Currently the NHS is struggling to find skilled Healthcare workers, mainly because there is a shortage of professional in the current job market. Rather than recruiting nurses and doctors from abroad, perhaps you should think of all the temporary workers in the UK, who are currently helping to keep NHS services running and afloat. Making it more difficult for temporary workers in all professions to be able to work in such a demanding set-up of short term contracts can potentially stop new candidates wanting to work in such a way. You should give people more flexibility in terms of arranging their own employment, rather than restricting it even further.
The HMRC should focus on recovering more tax from the large corporations that so effectively avoid paying billions of pounds. Instead your are going to squeeze honest working and earning professionals, who do not try to avoid paying tax, but are looking for a bit of help due to the requirements of being a temporary contractor. We still pay our income tax and what we save on expenses is PEANUTS! It would probably cost more in administrative costs to recover it than it's worth. Leave over-arching agreements in place.
Macieij - Locum Contractor
This is simply crazy legislation. It means that many contractors will not accept assignments where overnight accommodation or long commutes are concerned, as pay will be seriously eroded. This, in turn, will seriously stifle the UK economy which desperately needs to re-invest in large IT programmes after many tears of under-investment during the recent financial crisis. All UK areas North of London will be disproportionately adversely affected, as the pool of expertise is more geographically-remote from where most of the work is centred.
Chris - IT Contractor
My end client requires me to make occasional trips to locations in the UK and abroad. If I lose tax relief on expenses incurred, this could leave me out-of-pocket by multiple thousands of pounds.
William - IT Contractor
People should only claim tax relief for travel costs when they travel for work; i.e. from their real place of work to their temporary workplace (e.g. visiting a factory site away from their main place of work). The legislation in this area was to my mind always quite clear and had been the same in spirit for many, many years - if employees, temp or perm, travel to another site temporarily for work away from their main place of work (i.e. where they really work ordinarily every day) they can claim for the costs if their employer doesn't repay them that cost. Any other arrangements where temps claimed for travel beyond this (for example somehow claiming the cost to go to work every day) would have been artificial to my mind and if the government is cracking down on that kind of abuse then I am in agreement with the government.
I write to express my grave concern the effect the changes to travel and subsistence allowances announced in Budget 2015 will have on the Service industries. I believe the initial effect will be twofold.
First, people who currently rely upon allowances may choose or be forced by their loss to withdraw their service due to increased cost burden. I count myself among those individuals who will be bound by those considerations.
Second, as the market will invariably have to adjust, costs to UK businesses will increase, which will undercut UK output and competitiveness. This will likely drive down demand for services and amplify the first effect. I would regard this as serious impediment to my livelihood.
Successive UK governments have sought and promoted an adaptive and mobile workforce as a vital ingredient needed for a vibrant UK economy. This announcement quoshes that position entirely. I urge the government to reconsider with utmost haste.
Phil - IT Contractor
I'm unsure if I understand the budget changes properly, but if it means that I would lose the right to claim tax relief on what is in effect a direct cost that should not involve tax at all then it seems extremely unfair.
Do not think that this is some sort of way of earning tax-free money as a contractor. In my own case as a contractor I have not claimed any travel or expenses of any sort in the past 4 years. I claimed some in the previous year to reflect direct travel and subsistence costs for a specific project that involved a few days travel away from my working base as part of a bigger contract.
Contractors should be treated the same as anyone else; when there's an expense as part of a contract (or employment) then it should be properly paid.
Stability for contractors would also be a very welcome. Yes, it wouldn't surprise me if a tiny percentage of contractors abuse the system. But personally, I'm not aware of any and I think those days were left 20+ years ago. There'll always be some who abuse whatever system is put in place. But most just do a great job often in very skilled roles. I fill a role earning millions for a UK company with 100% exports to every corner of the globe. It is a role that cannot seem to be easily filled by the company I'm contracted to.
I started contracting in 1987 and left in 2001 because of the lack of stability created by the constantly changing regulatory goalposts. I left for a period lasting for the next 9 years - a period where I didn't earn a single penny in exports, where I reduced my employment activity and paid a fraction in tax compared to previous years. Since 2010 I've worked in contracting again, earning large amounts of money for the UK economy and paying a large amount in tax, and as I operate through a reputable contractor umbrella company it's all straight PAYE tax.
My Umbrella company invoices about £7,500 per month for my services (incl VAT at 20%, another DIRECT tax on my efforts). After take-offs (Employer's NI, Employer's NI and Income tax and my travelling and subsistence expenses) I net about £3200, LESS THAN HALF of the gross. The Government's take is more than I net. If travel and subsistence came out after tax and NI, my net would be down to about £2200, i.e. not worth the effort of travelling and staying far from home on top of working long and often stressful hours,
I am nearing retirement and during my 40+ year working career (25 years as permanent staff, 15 years contracting) and I have seen Government empowering HMRC to steal more and more and more of my hard earned cash. I was contemplating doing some winter work during my retirement which would generate a worthwhile amount of extra tax for HMRC. If travel and subsistence costs are taxed for my working at a non-permanent location it will MOST DEFINITELY NOT be worth my while so I won't work at all and they will get NO EXTRA TAX. The Government will be "cutting off its nose to spite its face". Hmmm. Nothing new there then! If HM Government don't allow for reasonable travel and subsistence for contractors they will loose out in the long run.
I would now rather not work and not pay taxes than be taxed on travel and subsistence costs where there is no opportunity for a PERMANENT place of work. Even then, the cost of relocation for any new staff job carries with it heavy costs and taxation in the form of Stamp Duty and VAT, and a very high risk of the job NOT being permanent. We need taxation rules which encourage people to find work and provide our industries with a substantial skilled and flexible workforce.
Tax avoidance by the super rich has never been tackled properly by any UK government. It is much easier to have yet another go at the middle class worker. It is every working person's DUTY to minimise the tax they pay and provide the best for their families. Before considering removing travel and subsistence allowances for non-permanent contract workers, HM Government and HMRC should be:
- removing all travel and subsistence allowances for UK and European Members of Parliament. They DO have a PERMANENT and NORMAL place of work.
-get their act together and tackle the really wealthy who pay little or no tax.
Also, they should look at some of their fraudulent taxations:
We all pay 20 % income tax on the pathetic 1/2% or so interest on money in our current or short term savings accounts, even when inflation is at 2.5% or higher. So, we pay tax on a devaluing currency, and who controls inflation? Hmmm. Smells like a scam to me.
Capital Gains Tax is another fraudulent tax when levied without a complete and full allowance for REAL inflation. If I bought a property for £100,000 ten years ago and sell it now for £180,000 I haven't made an £80,000 profit at all. The £180,000 now won't buy anything more than the £100,000 did ten years ago. All that has happened is the £ has been devalued; and who controls inflation? Hmmm. Smells like another scam to me.
Whilst I am happy to accept that the only certainties in life are Death and Taxes, taxation must only be on NET WEALTH GAIN, not gross income, otherwise the whole system will simply bleed to death.
Tony - Oil & Gas Contractor
I think you could have explained what the changes mean rather than ask us to look for a needle in a haystack. I am happy the the government is trying to tackle abuses and I am happy that Contractor Umbrella always tries to work within the regulations. I can understand that people in low earning professions might be affected unfairly if their job involves a lot of expense but from the details you give I cannot tell. No one in IT should whinge.
Niall - IT Contractor
I feel under attack. I am operating through an umbrella company paying PAYE, living away from home through the week and earning around 40k annually. I took a contract to get out of unemployment. I am now facing the prospect of being poorer.
I am not a tax avoider. I don't have permanent job. My end client doesn't want permanent staff for this job.
All this change will do is make some contractors seek ever more complex ways to avoid tax and it will no doubt leave me out of pocket.
Where is the fairness in all of this?
Mark - IT Contractor
It is clear both Labour and Conservatives are out to get those who take the risk to work on contract basis, there is an unrelenting cycle of tightening of tax restrictions against the very people the government should be nurturing.
Contractors are mobile, motivated and highly skilled, they are just the people the UK needs in a knowledged based global ecconomy.
The continued uncertainty in tax regulation and being self-employed leads me to four conclusions...
1. The government no longer wants any temporary workforce, they wish to force everyone into full-time employment.
2. The government is completely out of touch with the risks and uncertainty that faces a highly skilled knowleged based worker in today's economic climate, especially training.
3. The government is satisfied if you run a company under their definition - but there is no certain guidance let alone incentive to move from contractor to 'business'.
4. In trying to catch rogue employers of the unskilled workforce the government is more than happy to throw the baby out with the bath water.
As an IT contractor of 20 years standing I am currently looking at working in Gibraltar as an alternative option.
Mark - IT Contractor
Temporary work is often taken at locations long distances from home. A contractor takes on this work as they are aware that it is for a finite period of time. They would not choose this as a permanent job given the travel involved and would either find work closer to home or move closer to the Location. 24 months is a reasonable period to assume that the location is now 'permanent' and it is unfair to remove tax relief up to this period. Highly skilled temporary contractors fill vital roles for companies and public bodies, managing and implementing improvement projects which, by definition, are for short durations. This is beneficial to the company (no need to hire permanent staff) and the contractor (flexible life style). Removing tax relief for travel would, in my opinion, affect the willingness of temporary workers to travel outside their home area, thus depleting the skill pool available to businesses looking for temporary contract staff to work on high profile and vital business improvement projects.
Terry - Other
The proposed changes will decrease the appeal of being a temporary worker.As a result more people will reject temp work, and thus leave the UK with a skills shortage that will put us behind most of Europe and if not the Globe.
Having these benefits as a temporary worker should not be seen as a punishment. Let's embrace our flexible workforce and drive our economy forwards.
Michael - Other
I have looked into this and I think it would be an extremely bad idea. Umbrella companies help out HMRC and the government out a lot.
Us contractors don't have the security of a permanent role, so this allows us to earn that little extra just in case. This may stop people from wanting to temp!
Aimee - Teaching
I am a senior programme manager, specialising in ensuring that the desired benefits from any programme are effectively realised (Benefits Realisation).I am currently helping with the major work at Sellafield, Cumbria associated with ‘cleaning-up’ what has been internationally recognised as an ‘intolerable risk’. Sellafield probably has the greatest concentration number of contractors associated with it, within the UK.
It is however difficult to attract and retain suitably skilled expertise due to the lack of local skills and experience and the need to attract people from a much wider geographical area. The area suffers from poor transport links with the rest of the country, generally necessitating car travel and the need for local accommodation for those from outside the area.
Recently the Public Accounts Committee (PAC), amongst other aspects, expressed concern over the rising and significant costs associated with the work at Sellafield.
Against this backdrop, the government are proposing to disallow contractors from claiming travel and subsistence expenses against tax.
The government persist with this action it is highly likely that the following would immediately result:
Contractor cost to Sellafield - and therefore ultimately higher cost to all UK taxpayers - will increase, as contractors will simply seek higher rates to compensate them for what would now represent additional expense (in my personal case it would require 10-15% extra salary per annum due to the costs of accommodation in the area and the approximately 670 mile round trips home- which I undertake usually monthly)
Rather than being a flexible mobile workforce, UK contractors will tend to become localised to their specific geographical area - and the considerable flexibility within the UK workforce as a whole will therefore be dramatically reduced. Likely to lead to all manner of delays if insufficient staff can be attracted to given areas.
And specifically, the Sellafield clean-up may be delayed by being unable to attract contractors to the area.
I therefore consider that the government proposal is ill-considered, likely to damage the UK not help it and urge that the proposal be re-worked or abandoned.
David - IT Contractor
The umbrella company i work with have helped me alot and being employed is a great help, the expenses make my work more viable and i would probably not take many roles if my current situation had to change.
Olujimi - Care Worker
I have worked with a number of umbrella companies in my three years of contracting, all of which have been incredible helpful with a number of issues.
Firstly as a busy man it is an incredibly helpful for me to be able to leave all of my tax and NI deductions up to someone else, without having to worry about having to go through an accountant as my work is very much an ad-hoc basis and paying for an accountant and the maintenance fee for a few days here and there will mean the idea contracting will be significantly reduced.
Also by being able to use my expenses ie petrol and food costs to reduce my taxes, means that i can afford to travel further a field and do not have to limit my self to a select distance when contracting. If new legislation is brought in i will no longer be able to afford to work as much as i live in rural community with few opportunities in the local schools. Therefor my contribution to the economy will be significantly less.
Charlie - Teaching
ill be well out of pocket. travel 180 miles to site every week and then pay for digs. ill not be able to afford to do that anymore.
Tony - Oil & Gas Contractor
Many contractors feel that if these changes are implemented then many like me will be unable to take roles further afield .
Kelvin - Teaching
I need to be able to claim back my expenses. This is even more important now due to the fact that i now pay two lots of National Insurance compared most people paying it just once. That means I am already paying double national insurance because I am a supply teacher and not a permanent member of school staff on payroll. It seems that everything is being taken off me. All the subsistence expense does is patch up the short fall in the extra NI I have to pay. Why am I being penalised for being a contractor?
Simone - Teaching
As zero-hour contracts are sometimes forced on us by employers who often prefer them to permanent contracts despite the fact it negatively affects the long-term effectiveness of their enterprises, the Government should not tax us more by changing the T&S rules. Thanks!
Ron - Teaching
It won't affect me at all. Umbrella organisations take the same money from my pay as the government would and ask for more of my time. I want to pay tax and had already moved from such an organisation when the news was announced. I am more shocked that a union allowed the services of its members to be so devalued that they sought this route.
Tamara - Teaching
Without tax relief on travel and subsistence it would not be worth my while working. My last contract was a 100 mile round trip each day. Not only did this cost. A fortune each week in fuel, but also the wear and tear on my vehicle. As a teacher I am often in different schools on a daily basis. Whilst the is usually a school canteen on site, the food is so poor that I will not use the facilities. I usually leave site for lunch.
The changes will mean that either I start asking for pay,net closer to the £200 per day mark, or I give up supply work altogether and sign on!
Kenneth - Teaching
Due to the distances I have to travel at short notice the proposed changes would mean that I would be restricted to where I would work due to travel costs.
Admission fees are already deducted from my pay and it isnt feasible to go self employed as a supply teacher.
Margaret - Teaching
I work as a supply teacher in the rural area of Lincolnshire. Sometimes my travelling can be up to one hour or more. Without subsistence for travel, I would not be able to offer my services to such a wide range of schools.
Sally - Teaching
This is a short-sighted and mean-spirited move by the government. Mean-spirited because it seeks to remove a concession that is a vital component to a fluid and mobile contract workforce. Short-sighted because it will simultaneously push up cost, depress the market, and lower tax receipts. I really do believe contractors AND government will both lose if this measure is implemented.
Phil - IT Contractor
In other forms of self-employment and in paid employment you are able to claim expenses for travel and subsistence. Why therefore should contractors be subject to any different rules?
Kerry - Teaching
As a cover supervisor I can only get work when lessons need to be covered. I get £30 for half a day and £60 for a full day of work. Holiday pay and administration is taken out of these wages. If I did not get my subsidence and travel expenses paid I would be left with hardly any wages. MP's need to consider this when they eat their £150 lunches which they do not have to pay for themselves!
Michelle - Teaching
I am an agency teaching assistant who works all over the west midlands. Going from one place to another possible daily. It is very important to have the expenses petrol and food assistant has Ibam on a low wage and need ever penny I get.
Miranda - Teaching
I work as a supply teacher for two supply agencies.
In one I am paid directly by the agency and in the second I am paid by an umbrella company. I was given no choice on how I wanted to be paid by the second agency, except a choice of which umbrella company. There is little difference in what I receive in pay in each case. The difference is that in the first I pay tax, in the second I pay the company and then have to fill out expense claims in order for the company to avoid paying my tax.
I am glad that this loop hole is being addressed, as I strongly object to these companies making money on the backs of low paid workers and taking money out of the public purse.
I believe strongly that we all should pay tax towards the public good.
Susie - Teaching
This would affect me massively as I have to travel from Essex to London everyday to get to the school that I have been placed to be sub work for and I wouldn't have taken the position if it was for my mileage that i was able to claim to reduce my tax, I needed the assurance that make sure it was worth taking.
If this were to change then I would have to look at another industry that was more local to me which there isnt anything.
Tamara - Teaching
It is frustrating that workers are progressively having rights stripped from them.
Anna - Teaching
I was really disheartened to hear about potential changed to the budget.
As a temporary worker who is not on contract at my school, travel and subsistence expenses really helps me to keep on top of my finances. Living in London, travel costs up to £8 a day and makes a huge dent by the end of the week.
Were these allowances to stop, I would have to consider looking for other work that has a higher pay bracket to allow me to keep afloat. Furthermore I do not get paid for holiday time from the school, so the job would seem to be less feasible for me were the expenses to change.
Thomas - Teaching
We have a right to claim on expenses and other costs. We support the economy and our skills and training support, service, manage the areas in which we are qualified in.
We therefore have a right to not be penalised, so that fat cats in parliament can sit down making unfair, unjust and critical decisions.
Decisions that don't affect them, their families or friends. But communities, individuals and hard working, highly skilled individuals.
The current government are narcissistic and selfish. They have not supported the people that feel the effects of the selfish choices. Because so many don't stand up to be heard. This is due to complacency, poor knowledge and the on going truth, that it won't change anything.
It's time more voices were heard and things changed. For the better and for the 'everyday people'.
Chantelle - Teaching
My concern is that I use an umbrella company as I am a contractor in an industry that will not use the self-employed, but instead will only use Ltd liability companies. My choice, therefore, is either to set up my own company or to use an umbrella company. As I only work 2-days a week I chose an umbrella company for convenience, but feel I am penalised, particularly in the amount of employer NI I pay compared to if I was self-employed or if I set up my own company.
Terry - Oil & Gas / Engineering Contractor
Government seems intent on destroying a part of the services economy. Abolishing tax relief on travel and subsistence for contractors will mean I will no longer be able to accept work with long commutes. The number of opportunities open to me will diminish. I will either have to find lower paid permanent work or join the unemployment ranks. If my expected outcome proves typical for other contractors then this measure will backfire. The government and contractors will be left poorer. The government will of course claim it a resounding success.
Bob - IT Contractor
As a Limited Co Contractor, I would like to know if subsistence is to be taxed, will this also apply to permanent workers who, undertake rolls at at different location. which becomes a temporary place of work.
I have see where, they are under SDC, but receive, hotel paid for, up-to £150 a night, hire car with fuel, £35 tax free daily allowance, all meals paid for, travel-time every 2nd week, 5 hours each way.
Where will the line be drawn, are sub-contractors, being discriminated against in employment terms, and how will they squared this AWR for umbrella staff, ie, to be treated on the same terms are permanent staff after 3 months.
Ian - Oil & Gas / Engineering Contractor
the government want us to get on our bikes and find work and know want to penalise us for traveling in search of work
Michael - Other
This decision/rule is shocking this is first step to forcing IR35 on every contractor.
Everybody is control & directed by client even big 5 as far as IT or oil & gas sector goes. Because ultimately client decides the requirement.
Hemant - IT Contractor
Working with an umbrella company costs me money.
Gary - Driving
Last year I spent a considerable period of time working 45 miles away. I spent a lot of money on petrol and the maintenance of my car. Yes I claimed my mileage allowance as I was entitled to. However I also spent the best part of 3 hours a day travelling in order to do my job. I do not choose to work miles away. I go because that is where the work is at the time. I do not choose to add miles to my car. I just need the work. I do not think it is a bonus to claim for mileage - it is a necessity. No mileage expense allowance and people will just not go. It is hard enough being a supply teacher. You get work booked, another company phones you for work , you turn them down, and then your original booking can be cancelled. Then no work. The inconvenience of the job is huge. I love my job and that is why I do it. However it may become unaffordable if this goes ahead.
Joanne - Teaching
My main contract is in London at a customer site for my main client, with train travel, tube and accommodation costs I have nearly £1000 per month in expenses, this legislation could have dramatic effects on me and where I choose to work, where I live in Cheshire rates and opportunities just aren't as plentiful as in London. The Chancellor is punishing people the conservative party are meant to help.
Darren - IT Contractors
Because of the niche IT skills, potential clients are scattered around the uk and permanent work locally is a rarity
So I often end up working away from home during the week, staying in cheap hotels away from friends and family
At the moment expenses make this lifestyle manageable, I don't earn a fortune but it provides an alternative career where I can provide my own training and guide my own career in a rapidly changing industry
if I'm suddenly going to have to pay out for travel, subsistence and accommodation out of my own pocket then that will be the tipping point that sees me either working abroad and contributing less to the UK economy or packing it all in and going to do something else where I can make a living locally.
I'm sure I'm not the only one, and soon there will be a reduction in the UKs flexible workforce, enabling the big consultancies the public sector relies on to charge more due to the long term skills shortage that is inevitable
Andrew - IT Contractor
Regarding the proposals to end tax relief on travel and subsistence, I'd just have to say that because of where I live most of my roles require me staying away from home Monday to Friday.
If I'm suddenly going to have to fork out for travel, subsistence and accommodation out of my own pocket then I guess it'll be the tipping point that sees me packing it all in and going to do something else
Jim - IT Contractor
Removing travel and subsistence expenses from my day-to-day activities will make me far less competitive on the open market as a small contractor compared to much larger companies who may be able to absorb the cost associated with their abolition.
Having these expenses allows me to be able to search further afield for opportunities than I ever would have done when looking for permanent positions. Since I cannot commit to a permanent move given that my contracts can usually be terminated within a weeks notice, I think it would be grossly unfair to assume that I can afford to get by without these expense payments.
I believe the 24-month rule is currently working, and I consider it fair to assume that if a contract has exceeded this length of time, that the expense payments are no longer applicable given that the contract has exceeded a length that would have normally provided a fair amount of uncertainty and instability.
If these payments were removed, I think I would grossly narrow my horizons, making me far less competitive, and would allow larger companies to undermine my attempts to win contracts further afield. I think the current mileage allowance is already far less lucrative than it used to be, given the increase in fuel and insurance costs in recent years.
So, I think there are changes that can be made to prevent the abuse of the current system, but I also think there could be changes made to make the system fairer to small companies such as myself, not only more competitive, but also allow my company to bare more of the cost of my expenses in working outside of my permanent place of work for my company.
Luke - IT Contractor
I am finding it difficult to get full time work in education-so-as a teaching assistant i work for an agency who use an umbrella company to pay me . My rate per hour is very low-just above minumum wage. the fact that I can get help towards travel and food expenses is a bonus. Please do not end this. The government needs to address the fact that wages in many sectors need to rise -the people like me who do what are arguably among the most valuable jobs in society get paid little for it .Address the Gap between rich and poor-not make the poor-poorer.thanks
Warren - Teaching
The loser in the long term will be the Government and HMRC. Industry will lose access to contractors living outside their immediate region and won't be able to fulfil contracts that they otherwise might. In the currently competitive and turbulent marketplace, less contractors = more staff = more redundancy payments and jobseeker's allowance payments when things get a little tight, and who foots that bill?
I doubt if I would be any more sympathetic towards the 2016 proposals if HM Government and HMRC simultaneously:
- removed all travel and subsistence allowances for UK and European Members of Parliament. They DO have a PERMANENT and a NORMAL place of work.
-got their act together and tackled the really wealthy (the so called Super Rich)who pay little or no tax.
Whilst I may grudgingly accept that the only certainties in life are Death and Taxes, taxation must only be on NET WEALTH GAIN, not gross takings otherwise the whole system will simply bleed to death, not even the NHS will be able to save it!
HMRC and Government should also retract some of their outright fraudulent taxation like:
- taxing 0.5% interest on current accounts and instant access savings accounts while inflation (caused and controlled by Government under the title 'Quantitative Easing' ) is 2.5% or more. We are all paying tax on what is in a reality a loss!
- VAT, Value Added Tax is in most cases nothing to do with 'Added Value' and more usually to do with adding further tax on top of 'Duties' which have been levied before VAT was applied. A more correct acronym would be TOT, 'Tax On Tax'.
Tony - Oil & Gas / Engineering Contractor
Agency work completely sucks! I have worked in 3 different sectors this year and have had very similar experiences in each - poor rates of pay, no security, a significant percentage going to an umbrella company, agency fleecing the employer. The bonus for doing a conscientious job? Getting shifts next week or the unconfirmed possibility of future work.
One might argue that I chose this course of action, however this was really the only way I could make a contribution to my household income.
I'm currently on an extended supply teaching assignment and have fought for an enhanced daily rate, to compensate for planning lessons and marking work. This leaves me with 75% (gross) of the salary I was on whilst contracted. Of course I don't get the teachers' pension bonus and I will need to work my summer 'holiday' to make ends meet.
John - Teaching
There will be a complete breakdown in construction after the expenses are removed after april 2016, I will tell you my typical working week, up at 6.45, make pack lunch at my expense (no claim here, drive to work from say 4/5 miles up to an average of 40- 70 miles away to sites all over devon, public transport does not work for me and hundreds of thousands of other construction trades the timetables and cost etc will not work, plus I have to carry a van full of tools for my trade as a carpenter.joiner I drive to work at present exeter, a round trip of 42 miles, I park in the town 5 minutes walk from site cost= £10.80 a day I walk during the course of the day back/forth to my van for tools as my jobs change, its not safe to leave my tools all over the site as they walk have over £6000 of tools (you have to supply all tools as contractors supply none), I also sit in my van at break times as most site provide a small canteen and there are to many men on site. So when the expenses are removed, and we are working through agencies and on paye, which i am at present through an umbrella company the whole thing will fall down If all constructions guys where put on the books and paid expenses like back in the 70s fine, but all main contractors and sub contractors and also agencies etc have no wish to have men on the books and they all want the hire and fire as and when req labour force as present, I have worked as a carpenter for 45 years first on the books for a company then a period on the 714/715 system (which was the best ) then sc60, then cis - 20% now umbrella so i think along with many more men in construction it will not be worth going to work without any kind of tax relief on van/motoring costs, tools and constant replacement of , parking to pay for etc my van is approx 125 per week to run, parking for 5 days =£54, tools replaced or more, =£400.00-1000 per year so please tell me how its all going to work ps my site has a large east european work forces as well who are all on a lot lower wages than brits thanks
Stephen - Other
A transient workforce is essential to the IT industry and these proposed HMRC changes would severely impact the flexibility and availability of getting the right person into the correct temporary contract employment.
Mark - IT Contractor
As a part time exam invigilator in Secondary schools in London the impact of not being able to claim my travel costs would mean the level of pay would be too low to continue with this worthwhile and enjoyable work.
Karen - Teaching
Government policies have allowed Schools to manage their own budgets and in doing so almost every LEA recruits supply teachers through agencies. We have no choice in the matter and if working directly for an LEA I would earn 130 a day instead of 90 which is what I earn now but only recently as before was 85. I travel as many as 80 or 90 miles a day fairly often and if I were not able to claim my expenses out of tax I would have to refuse work since it would bring my actual pay down to approx55 a day.Add to this the fact that I only get paid for term time and already you see that there are three months a year with no money. Also there are quiet periods when there is little work such as the first two weeks after a holiday so in reality I only work 7 months a year. I would not put myself through the stress of this work when I could get the same amount or more over a year working a couple of hours longer in a shop.Think again politicians you need supply teachers as there is now a 50% drop out rate in this profession after the first two years, a government that denies hard working people an umbrella company whilst allowing Star bucks and alike to use our communications networks and work force here in Britain whilst setting up a so called office in The Netherlands to avoid tax and chasing after us the little people cause we are the easier target will never get my vote or respect, It was government that enabled the supply teachers agencies to flourish while doing down teachers pay that necessitated us using umbrella companies in the first place. Governments have become to expensive and greedy since 50% of all taxes is used to govern us . Scoundrels if you take away my umbrella company as I will be below the breadline without them instead of on the bread line as I am currently.
Yvonne - Teaching
I have no choice other than to use an umbrella company as the company I work for only employs through one. As I am employed in a wide variety of schools over a 50 mile radius and have generally no idea where I'm working from day to day I find it stunning that I am being told by the government that I am dodging taxes by claiming fuel allowance that an executive working for a company or a member of the armed forces claiming home to duties expenses would be entitled to claim. It was a big enough shock to find out that I am paying employers and employees tax but to be told that I'm taking money illegitimately and basically be told I'm a tax dodger was a harsh blow.
I have never turned a school down who have needed me. I have been threatened, in one school on a daily basis, I face tough working conditions in a sector (supply teaching) that many of the staff actually don't care and refuse to do part of the job. I take pride in my work and have a good reputation as the person who will stay when all others leave. To be classed as a tax dodger makes me feel dirty and crushed. If the tax I get back off my travel expenses (and lets face it, that's all it is we get) is taken off me then I do not feel able to justify travelling all that way any longer and I will not be the only one. This means schools will not get the supply teachers they need to function. Yet again it's another blow aimed at teachers.
I don't know how the terms 'supervision, direction and control' are supposed to be read here. Of course I'm under direction as a teacher, isn't everyone? Control? Well obviously I'm not about to just walk out of class and I'd be in trouble if I did... Supervision, ok, I'll let that one slide, I'm not supervised. One thing is for certain, the conservatives lost my vote on this issue. I never destroyed a ballot paper before but I am now.
If I was given the choice I would not be employed by an umbrella company, however it's a choice of this or unemployment and my boredom threshold is far too low for that.
Alex - Teaching
I operate a Limited company providing IT consultancy services, and therefore expect to be able operate as any other IT consultancy such HP or Computacenter on a level playing field.
Such legislation is purely a mechanism to skew in favour of the larger consultancies and stifle growth of smaller and specialized consultancies. I am in no way a disguised employee, given all measures that the HMRC would attempt to keep insisting that I am, and this consistent persecution will eventually lead to the UK losing essential IT skills.
Jason - IT Contractor
I am not an umbrella employee - I operate via a limited company, so on the surface the changes should not apply to me.
And yet, they will.
The proposed changes does not distinguish between entirely different operating models - my company as opposed to those operating through umbrella companies as employees - and so seeks to redefine a temporary workplace, meaning we lose the ability to claim expenses for travel to client site. This is an unsupportable overhead for many, and appears to be specifically aimed at removing an entirely valid and justifiable cost recovery.
In the past, I have worked all over the country (and in other locations around the world), because I am a flexible resource and I work on contracts for clients that are in diverse locations. I cannot simply move house every time I change client (which may be three times a year, or may be once every two years). I may be at a location for four weeks, or I may be at a location for 18 months - but to remove the ability to claim valid travel expenses from my office in Lancashire to my temporary client in London would prove ruinous to the business, and deprive the clients of the resource that they want.
However, if I was a permanent employee (contributing less tax to the exchequer), my expenses for travel to the same client would be allowable for taxation purposes - a blatant discrimination of small business in favour of big. All small business wants is a level playing field, and this absolutely tilts it in favour of big business whilst destroying small businesses at the same time.
Matthew - IT Contractor
I travel various distances on a weekly basis using my own vehicle. This can on average be between 250 and 350 miles. I am now going to be expected to cover the loss of tax relief on my mileage, effectively a pay cut in my take home pay. I would like the current government to look at the top end of the earnings ladder where the real savings could be found in tax avoidance, instead of hammering the ordinary working man (as usual), trying to earn a decent wage.
Allan - Oil & Gas / Engineering