Save the date for FCSA Forum 2024 – Tuesday July 2nd in London


Election predictions

Tax is a key issue for all parties, evasion and avoidance, and the recent HSBC revelations continue to fan the flames sot hat tax will continue to feature heavily in politicking by all parties.  But I hope that flexible workers, who work hard to UK plc, will not be unfairly penalised in future policies.  Specifically to our sector, Labour has said it will stop umbrella companies from exploiting tax reliefs which illustrates a clear lack of understanding and would only serve to specifically reduce income for contractors that provide an essential flexible resource to UK plc.  By contrast, the Conservatives appear to have a better understanding of our sector with David Gauke, Financial Secretary to the Treasury, acknowledging the positive role of umbrella firms in the supply chain.

Latest HMRC policy proposals suggest that ending tax deductible travel and subsistence expenses will not apply to those genuinely self-employed, however whilst this appears to be positive it remains to seen how employment status will be defined in practice.  It is worth noting that MPs travel expenses are tax deductible as they travel to and from their various temporary workplaces, and there is an argument for fairness with one rule being applicable to all.  Otherwise there is a risk of de-incentivising elements of the workforce that are targeted, whose income is reduced, with the price ultimately being paid by business.

Labour policies recognise the need to nurture the business vote which they will need to balance with the influence of trade unions protecting workers rights.  This will no doubt see Labour focus on targeting bad practices that potentially exploit workers, so we will need to influence their policies to minimise unintended business consequences and ensure that there is no collateral damage.

Interestingly, a potential opportunity for contractors has come from David Morris MP, Freelance Ambassador, giving his word that if he gets back into Parliament he will look into simplifying IR35 which continues to be problematic for many.  No easy task ahead!

My advice for the forthcoming election uncertainty is to get your house in order, ensure you are operating compliantly and paying the right taxes.  Whatever shape the next government takes, it seems likely that our sector will remain misunderstood, scrutinised, and subject to legislative change.