FCSA hoping to effect change following Summer Budget
The Summer Budget was a mixed bag for those who work for themselves, with some of the Chancellor’s planned changes being well-received, such as the lowering of the rates of corporation tax and the increase in the tax-free allowance, but some plans proving incredibly unpopular. The Freelancer and Contractor Services Association has used the Chancellor’s announcement as an opportunity to apply pressure to the government to address the issues that they believe were thrown up by changes to legislation back in March.
The amendments made to the legislation of the March Finance Act, which were made without consultation, will have a significant impact on those contractors who work through umbrella companies. The changes mean that, as of April 2016, contractors will be unable to claim tax relief on travel and subsistence claims as they are incurred, and will instead have to include them on their self assessment tax return.
Julia Kermode, the FCSA’s CEO, believes that there is no real reason to delay the payment of these kinds of expenses and is concerned that introducing legislation which will have such a dramatic effect on the incomes of those affected shows a lack of consideration for the flexible workforce. She believes that there is a risk of damage to the reputations of umbrella companies in the light of the changes to the way expenses are paid, something which the FCSA is keen to avoid.
Umbrella company contractors will effectively be taking home less money from April 2016, despite doing the same amount of work. The FCSA are keen to challenge the Chancellor on this issue in the hope of changes being made before the legislation takes effect.
If you are a contractor and want to protect yourself against the issues which could arise next year, then our guide to contractor expenses could help you to understand your options. We can also help you to understand the advantages and disadvantages of a limited company and offer our advice on any issues you might come up against such as the intricacies of IR35.
If you want some expert advice on anything from tax planning to preparing for your retirement, then our expert accountants are always on hand to help. Call us today on 01442 275789 or email firstname.lastname@example.org for more details.