Autumn Statement: Your efforts have made a difference
Posted on: Thursday 26th of November 2015 10:44
In recent weeks and months I have written to you to enlist your support in opposing measures which would harm the UK’s smallest businesses: the toughening up of IR35 and the restriction of travel and subsistence tax relief. Many of you have written to your MP, taken our surveys and attended our focus groups. With your help we have led a campaign to stop the Government from pursuing these harmful policies. Today’s Autumn Statement suggests our efforts have made an impact, but the fight is not over.
Rumours that the Chancellor would announce measures forcing contractors onto the client’s payroll after one month’s work thankfully proved unfounded. There was no mention at all of IR35 in the statement or the subsequently published documentation. Shortly after the Chancellor finished his statement, senior officials confirmed to us that the Government is still considering its options on IR35. The Government have listened to IPSE and told us they will take more time to find a solution which protects the Exchequer and improves fairness in the system without creating disproportionate burdens on business, or widening the scope of the rules.
We will, via our seat on the IR35 Forum, remind them of this commitment and continue to press for real reform that will benefit, not hamper UK contractors.
On travel and subsistence, the Government had proposed to introduce a test which we believe would have resulted in many contractors not being allowed the relief to which they are entitled. Encouragingly, the Government has dropped plans for this test. Instead the tax relief will only be restricted where the contractor is caught by IR35. This is a big step in the right direction and it is what we called for in our consultation response, but we mustn’t be complacent. Until we know what is going to happen to the IR35 rules we may still find unfair, damaging restrictions being imposed. We will continue to press this point with Government, knowing that the success of so many businesses rests on being able to claim this relief.
Tax avoidance remains high on the political agenda. Disguised remuneration schemes such as Employee Benefit Trusts were singled out for further scrutiny and the Government is considering new legislation that would capture any schemes devised between now and the enactment of the next Finance Bill. IPSE’s advice to its members has always been to avoid using such schemes and I am taking this opportunity to reiterate that advice.
It is only with your support that we can make the strongest case to Government. So a big thank you from IPSE for your recent efforts. You deserve a regulatory environment that lets you grow your businesses. Your success will only make the UK more successful and this is the message we will bring to policy makers.
Chris Bryce, CEO