SNP presses Osborne for contractor tax review

An amendment to the Finance Bill that would commit the chancellor to both review the tax position of contractors and report back within six months has been tabled.

Aimed squarely at considering contractors and “workers who provide services through intermediaries,” the amendment was made on Friday by the Scottish Nationalist Party (SNP).

It follows condemnation by the SNP of the curbs to travel and subsistence tax relief for such workers, notably if they are ‘SDC’ or caught by IR35. These curbs took effect on April 6^th.

Put forward by SNP’s Roger Mullins, who reportedly regards the restrictions as an “act of social and economic injustice,” the amendment already has the backing of 55 MPs. It states:

“The chancellor…must conduct a strategic review of the impact on workers defined as providing services through intermediaries of their treatment for income tax purposes”.

The review must consider the “different impact on different types of worker” and commits George Osborne to publish a report on the findings “within six months” of the bill passing into law.

However, in a recent policy paper the government said the T&S legislation did “not have any significant economic impacts” and would have only a “negligible impact” on businesses.

PRISM, a contractor trade body, disagrees. It estimates that the now in force T&S legislation will hit up to 1.6million workers by imposing a pay cut on them of up to 20%.

The body is offering a letter template for contractors to object to their local MPs about the rules, which also inspired a petition, an open letter to Mr Osborne and an Early Day Motion.