'Contractors, set HMRC straight on SDC's impact'

The taxman is using a poor response rate to his proposal to ban tax relief for 'Supervised, Directed or Controlled' workers as the basis to surmise that it won't catch contractors.

Speaking last week, HM Revenue & Customs said it thought that umbrella and PSC users must be out of scope, on the grounds that only three contractors replied to the discussion document.

Industry body AUCAE has now sprung into action, by asking contractors to fill in a form asking how ‘SDC’ will affect them, so HMRC can see the true impact its proposal will have.

“[SDC] will undoubtedly transform the contractor market,” the body warned. “But if we don’t have statistics and hard facts to back up such a big, negative change, HMRC won’t listen”.

Lucy Smith, of All Umbrella Companies Are Equal (AUCAE), added that tax relief ending on travel and subsistence expenses for SDC contractors won't only affect contractors.

“There’s going to be a potentially significant change for umbrella companies, PSC’s advisers, recruitment agencies and even end-clients, and it’s likely that change won’t be for the better.

“So we urge all these parties and contractors themselves - whether a PSC or umbrella – to fill in the survey form so their views can be recorded, anoynmised and then put to HMRC.”

All submissions will be presented as part of AUCAE’s own response to the HMRC consultation on SDC and must be made by August 23. They will also be sent to No.11 Downing Street.

“HMRC’s first consultation getting just three responses from contractors has wrongly led tax officials to believe that SDC’s impact on contractors will be minimal," said Smith. "Fill out this form to help put the Revenue right."