Staff body backs worker tax arrangements probe

A pledge in Autumn Statement 2016 to scrutinise people who do ‘the same work but under different tax arrangements’ has been welcomed by another big name in the contractor sector.

The pledge (at AS 4.13) was initially supported by the boss of an accountancy group, after he met with chancellor Philip Hammond and heard the sector being encouraged to take part.

Now, a staffing body whose members place IT contractors is “glad to see that government accepts that there is a need [to explore] … this area,” likely to be in a consultation.

In particular, there should be a “simplified and consistent tax regime” for all types of “supplied personnel,” believes the body, The Association of Recruitment Consultancies.

This regime would lump agency staff, the self-employed and PSC contractors into a single system, seemingly at odds with an alert against adopting a ‘one-size-fits all’ mentality.

But rather than a new measure to support such atypical workers, three announcements were made as part of the Autumn Statement pledge which may adversely impact their bottom lines.

Firstly, the government will explore the taxation of benefits in kind expenses; it will then probe employee business expenses and thirdly, from April, it will phase out salary sacrifices.

The CBI, the employers’ group, said of the latter: “While exempting important areas like pensions and childcare, this measure sends the wrong signal to companies wanting to invest more in employee health and wellbeing.”