SNP calls for strategic review of income tax for contractors

The definition of contract workers need to be amended to reflect their status as the current system of shoehorning them into either employed or self-employed status for income tax purposes, is out of date and not fit for purpose, according to an amendment tabled by the SNP Treasury spokesman during the debate on Finance (No.2) Bill earlier this week

SNP Treasury spokesman Roger Mullin MP has called for a strategic review of the tax status of contractors especially with in light of plans to remove travel and subsistence relief and is calling on the Chancellor George Osborne to report back within six months.

It comes after meetings between Mullin and the employment intermediary trade body Prism, which has been campaigning for the review.

Prism hopes it will result in official recognition for contractors and the way they work for the first time, as workers have historically been forced into one of two categories - employed and self-employed.

Mullin’s amendment reads: ‘The Chancellor of the Exchequer must conduct a strategic review of the impact on workers defined as providing services through intermediaries of their treatment for income tax purposes, including the differential impact on different types of worker, and must publish the report of the review within six months of the passing of this Act.’

Speaking at the Finance Bill debate on 11 April, Mullin also made clear his party’s opposition to the Chancellor’s changes to travel and subsistence (T&S) relief.

The government is removing T&S relief for contractors despite the fact they work at a series of temporary workplaces and lack job security.

The changes will hit contractors working in rural areas, and in the oil and gas industry which is key to Scotland, particularly hard.

Crawford Temple, CEO of Prism, welcomed the SNP amendment.

He said: ‘Roger Mullin and his SNP colleagues have recognised the desperate need for a strategic review and it is fantastic that he has tabled the amendment.

‘The way people work in Britain has evolved over many years and government in the way it treats people for tax and other purposes has not kept up.

‘The flexible workforce is one of the best things about the labour force in the UK and it is key to our future economic strength.

‘This third way of working cannot be ignored any longer. We cannot go on any more with a two-sizes-fit-all system when the country would benefit wholesale from the rules, laws and regulations being brought up to date to recognise the entrepreneurial strength of contractors.’ 

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