Council travel expenses show holes in government’s planned contractors’ policy
In the midst of the row over contractor travel and subsistence expenses, a case which seems irrefutable has come to light to really draw focus to how the government could fall foul of their own policies. According to the Freelancer and Contractor Services Association, the government has recently revealed plans to introduce a brand new system of tax relief designed to provide local councillors with tax deductions for the costs associated with travelling between home and work.
Considering the fact that the same government has recently announced plans to remove a similar tax relief system which allowed contractors to claim for travel and subsistence expenses, many people believe that this move demonstrates an inherent lack of understanding about the parallels involved.
With as many as 45,000 contractors concerned about their futures as independent professionals should the changes come in as planned next April, the announcement by David Gaulke of the Treasury is bound to stick in the craws of thousands of contractors. He cited the inability to see constituents at home should they not be able to claim relief on travel between their own homes and their places of work as a reason for the allowance made to councillors, and stated that the government does not think that is fair.
With HM Revenue and Customs proposing to remove exactly the same benefit from contractors in the coming months, it’s no surprise that this has caused outrage amongst those set to be worst effective and the trade groups that represent their interests. Indeed, the FCSA has accused the government of ‘total hypocrisy’ for their standpoint, given that ‘fairness’ was the main reason cited for removing the same benefit from contractors, freelancers and other independent professionals.
They have pointed out how far-reaching the problem could be should those who will be ineligible for the tax relief be unable to continue in their current lines of work, reminding the government that it could mean the loss of as many as 4,500 supply teachers, not to mention those working in health, IT and engineering.
If you want to know more about your position with regard to what you can and cannot claim, our guide to contractor expenses will give you some guidelines as to how you can reduce your tax bill. For more information about anything to do with contracting, our contractor case studies provide plenty of insight and our free contractors’ guides can answer any questions you might have.
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