Umbrella company contractors will be aware of the recent changes to the new travel and subsistence legislation put into place last month. Now, HMRC has admitted that this legislation will need rewriting after admitting getting the wording wrong.
From 6th April, travel and subsistence relief was restricted to many umbrella company contractors who’s working practices do not adhere to the ‘Supervision, Direction or Control’ rules.
However, it has recently come to light by a Revenue official that there were ‘unintended consequences’ being made from this new legislation and that ‘To resolve this, the legislation will be amended at the earliest opportunity’.
Paul Hughes, group tax and business development director at I-PAYE and an executive member of Umbrella Trade body PRISM, commented, “The Finance Bill 2016 is currently making its way through Parliament and it was hoped that with clear guidance intermediaries, PSC and umbrella, could move forward with a degree of certainty.
“Having been widely criticised for the appalling amended guidance, it now seems that HMRC cannot even write the legislation to align with Parliament’s wishes.”
Crawford Temple, CEO of PRISM, said, “There is so much complexity in employment legislation and so many different tests that the people who write our laws cannot even get it right first time.
“What chance has the ordinary man and woman got who are not tax experts but nurses, engineers, teachers, construction workers and IT experts?
“This is proof if any were needed that PRISM’s proposed strategic review, backed by 55 cross-party Parliamentarians and a Commons intervention by a major opposition party, is long overdue. UK workers are classed officially as either self-employed or employed. The truth is there is a third way of working and contractors are losing patience waiting for government to play catch up.”
He added, “HMRC and the Government do not understand how the UK’s flexible workforce currently works and the continued shoehorning of workers into either the self-Employed or employed camps is outdated.”
Daniele Cantello is an Contract Manager for Contractor Umbrella Ltd, one of the UK’s Most Respected Umbrella Companies. Learn more about Daniele on Google.
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