Engineers cry foul on tax change

Engineers cry foul on tax change
Richard Wilson Contract engineers are claiming “unfair treatment” after the government moved towards introducing new tax legislation before an agreed consultation period was completed. “It became clear that this was not about the fair treatment of contractors,” said David Ramsden, director of the Professional Contractors Group, which made its submission to the government last week. “Discussions with the Revenue have yet to take place and the closing date for comments about the so-called Friday-to-Monday proposal was the end of last week. Yet the government has unilaterally begun the legislative process.” A government amendment to the Welfare Reform Bill which targets the independent contractor was voted through in the House of Commons last week, as predicted in Electronics Weekly. “We sympathise with the government’s aims on this matter – but we would ask them to reconsider their position and do nothing which would damage the important knowledge-based industry in this country,” said Ramsden. The issue centres on tax proposals which are intended to counter tax and National Insurance (NI) avoidance in the area of personal service provision (IR35). Chancellor Gordon Brown explained how someone who leaves employment on a Friday and returns on Monday as an indirectly engaged ‘consultant’ pays substantially reduced tax and NI contributions.


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