Contractors will not be given their fair say over tax changes

Contractors will not be given their fair say over tax changes
Richard Wilson
Contract engineers claim “unfair treatment” following the start of government moves to introduce new tax legislation before an agreed consultation period on the issue has been completed.
According to David Ramsden, director of the Professional Contractors Group: “The Government has acted prematurely and we believe that in the next few months, the strength of feeling will be impossible to ignore.”
On Monday this week a government amendment to the Welfare Reform Bill which targets the independent contractor was voted through in the House of Commons, as predicted in Electronics Weekly.
“It became clear that this was not about the fair treatment of contractors,” said Ramsden. “Discussions with the Revenue have yet to take place and the closing date for comments about the so-called ‘Friday-to-Monday’ proposal is not until the end of the week. Yet the Government has unilaterally begun the legislative process.”
As well as concern over these legislative moves before there has been full consultation with industry on this sensitive issue, the PCG is also alarmed that the government’s tax proposals may go further than the original Friday-to- Monday proposals.
The issue centres on tax proposals by the Chancellor which are intended to counter tax and NI avoidance in the area of personal service provision (IR35). Gordon Brown explained how someone who leaves employment on a Friday and returns on Monday to do the same job as an indirectly engaged ‘consultant’ pays substantially reduced tax and NI contributions.
“We think that the Government has underestimated the strength of feeling on this issue and hundreds of contractors have already contacted us to express their deep displeasure at the way the Government has acted without waiting for their views to be heard,” added Ramsden.
For further information see the Contract Engineer section.

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