The Freelancer and Contractor Services Association (FCSA) has learned from Tuesday’s Public Bill Committee session on the Finance Bill 2015-16 that the Government is making moves to introduce a NEW tax relief for home to work travel for councillors. This comes on the back of the Government’s resolve to target freelancers and contractors with its Travel & Subsistence proposals to remove any valid entitlement for the same tax relief.
David Gauke was quoted as saying that “changes in working practices mean that fewer councillors see constituents at home, so most are no longer eligible to relief for home-to-work journeys. The Government does not think that is fair. We want to ensure that no one is discouraged from undertaking a role as a councillor due to the tax treatment of their travel expenses.”
David Gauke was recently quoted in an HMRC consultation as saying it was not fair that contractors benefit from this tax relief whereas permanent employees do not.
Julia Kermode, Chief Executive of the FCSA said: “It is outrageous that the Government is potentially removing a tax relief for an economically vital portion of the UK’s workforce whilst simultaneously introducing the same tax relief for government officials. The reasons given are around fairness, but this is total hypocrisy.
“The damage that will ensue from removing Travel & Subsistence tax relief for the flexible workforce will be significantly greater than the benefit of introducing the same relief for councillors which will be minimal and certainly not far-reaching. In contrast, by removing T&S relief for contractors we will see potential skills shortages and assignment cost increasing. FCSA research tells us that 30% of supply teachers will consider an alternative career if T&S tax relief is removed. This equates to a loss of 4,500 teachers based on ONS data that 15,000 primary and secondary teachers classify themselves as self-employed.
“And, aside from education, T&S reform will impact other workers who fulfil a temporary need across all sectors such as IT, health, engineering, public sector, plus Government policy commitments to the Northern Powerhouse, new housing, and infrastructure projects will all suffer too.
“The message from Government is clear – they value councillors more than the flexible workforce upon whom our economy recovery is dependent; it is further proof that all the political posturing and recognition of the value of freelancers and contractors are nothing but empty words.”