Having become slightly irritated I have sent the following to Lord Andrew Feldman, David Gauke and the editor of the Daily Mail:
It really is no wonder that people in this country of ours have lost faith in their Politicians. This will be my third email to you since 10th August and I have yet to receive the courtesy of a reply or even an acknowledgement.
When the Conservative party was running for Government in this year’s General Election I was called upon, as the Managing Director of a large turnover business, to offer my support. I was happy to do this as I believed that the Conservatives were supportive of business, especially micro businesses and entrepreneurs. It seems that my faith was sadly misplaced as proposed changes to legislation will have a significant negative financial impact on those workers who help to boost the UK economy by offering their skills to companies on a temporary basis. These workers, contractors, travel long distances and often stay away from their families during the week to fulfil contracts in specialist industries such as IT, Oil and Gas, aeronautical, finance, the railway sector and nuclear power, often within the Public Sector.
I am sure that our MP’s at Westminster recognise that lifestyle, as their work takes them away from home; like contractors they are allowed to receive tax free reimbursement of travel and accommodation costs; this is not unreasonable. However, from 6th April, contractors who are unable to prove that they are NOT subject to supervision or direction or control or the right thereof will lose the right to claim tax relief on their travel and accommodation costs. This is a ridiculous test; it is virtually impossible, in law, to prove a negative and there is no case law to support the use of a single determinant for employment status.
I offered my support to you when you asked it of me. I am asking for your support now. Will you please let me have your considered justification for this attack on contractors and reasons why, if this change applies to them it does not apply to you.
If this legislation goes ahead contractors will either be unable to make their expertise available for contracts which are anything other than a short travelling distance from their home or they will look for rate increases to compensate them for their loss of earnings. Both of these will have an impact on UK businesses which are the foundation for the continued recovery of the economy.
This move is also likely to be unpopular with the electorate once the media realises that the worst hit from these changes will be low paid workers. Employment costs are increasing all the time thanks to legislative changes from the UK Government or Brussels so more and more large businesses are absolving themselves of the financial responsibilities of employment by forcing their workers through umbrella companies or into Personal Service Companies. The change in status would have a negative financial impact on the workers as Employer’s National Insurance would have to be paid by the umbrella company or the PSC from the agreed contract rate. The umbrella company would deduct a margin from this rate or the worker would be liable for accountancy fees. If the workers are moved, with the business paying the same hourly rate to the umbrella company or PSC as the worker earned in direct employment, then the worker will be significantly worse off. This has already been demonstrated following recent changes forced upon construction workers: Workers were promised £13 an hour - so why did they receive minimum wage only? - Andrew Penman - Mirror Online . Umbrella companies were scape-goated but both the Unions and the construction companies were involved in the consultations before the legislation was introduced and knew exactly what the outcome would be if the construction companies themselves did not adopt the mantle of employer – the worker would suffer financially.
Compliant umbrella companies do not operate zero hours contracts and do offer all the Statutory payments but they were not designed as a vehicle for low paid workers; they were intended for use by highly paid, highly skilled contractors who used their services as an alternative to operating a single person Limited Company. They are now being used by companies wishing to avoid the responsibilities of employment and to cut costs. The proposed new legislation on travel and subsistence will mean that many workers will be going home to their families to explain that their take home pay will be reducing for the second time in just a few months. I have no doubt that those hard working families will question whether or not it is in their interest to continue working.
Surely it would be simpler and fairer for Government to legislate to remove these workers from umbrella company employment and from self-employment? We have previously suggested that the easiest solution would be to state that workers who earn, say, living wage plus 20% cannot be employed through an intermediary but must be employed direct and that those workers cannot be engaged under a fettered zero hours contract.
I have copied in Paul Dacre of the Daily Mail to this email as I believe that this proposed change in legislation will seriously impact growth in the UK and will penalise workers who should not suffer because they are prepared to travel long distances to fulfil short term contracts and that the people of Britain need to be made aware. It’s interesting to note that the large consultancies who are responsible for many Public Sector contracts will not be affected by the changes to legislation and neither will the politicians who are introducing them!
It really is no wonder that people in this country of ours have lost faith in their Politicians. This will be my third email to you since 10th August and I have yet to receive the courtesy of a reply or even an acknowledgement.
When the Conservative party was running for Government in this year’s General Election I was called upon, as the Managing Director of a large turnover business, to offer my support. I was happy to do this as I believed that the Conservatives were supportive of business, especially micro businesses and entrepreneurs. It seems that my faith was sadly misplaced as proposed changes to legislation will have a significant negative financial impact on those workers who help to boost the UK economy by offering their skills to companies on a temporary basis. These workers, contractors, travel long distances and often stay away from their families during the week to fulfil contracts in specialist industries such as IT, Oil and Gas, aeronautical, finance, the railway sector and nuclear power, often within the Public Sector.
I am sure that our MP’s at Westminster recognise that lifestyle, as their work takes them away from home; like contractors they are allowed to receive tax free reimbursement of travel and accommodation costs; this is not unreasonable. However, from 6th April, contractors who are unable to prove that they are NOT subject to supervision or direction or control or the right thereof will lose the right to claim tax relief on their travel and accommodation costs. This is a ridiculous test; it is virtually impossible, in law, to prove a negative and there is no case law to support the use of a single determinant for employment status.
I offered my support to you when you asked it of me. I am asking for your support now. Will you please let me have your considered justification for this attack on contractors and reasons why, if this change applies to them it does not apply to you.
If this legislation goes ahead contractors will either be unable to make their expertise available for contracts which are anything other than a short travelling distance from their home or they will look for rate increases to compensate them for their loss of earnings. Both of these will have an impact on UK businesses which are the foundation for the continued recovery of the economy.
This move is also likely to be unpopular with the electorate once the media realises that the worst hit from these changes will be low paid workers. Employment costs are increasing all the time thanks to legislative changes from the UK Government or Brussels so more and more large businesses are absolving themselves of the financial responsibilities of employment by forcing their workers through umbrella companies or into Personal Service Companies. The change in status would have a negative financial impact on the workers as Employer’s National Insurance would have to be paid by the umbrella company or the PSC from the agreed contract rate. The umbrella company would deduct a margin from this rate or the worker would be liable for accountancy fees. If the workers are moved, with the business paying the same hourly rate to the umbrella company or PSC as the worker earned in direct employment, then the worker will be significantly worse off. This has already been demonstrated following recent changes forced upon construction workers: Workers were promised £13 an hour - so why did they receive minimum wage only? - Andrew Penman - Mirror Online . Umbrella companies were scape-goated but both the Unions and the construction companies were involved in the consultations before the legislation was introduced and knew exactly what the outcome would be if the construction companies themselves did not adopt the mantle of employer – the worker would suffer financially.
Compliant umbrella companies do not operate zero hours contracts and do offer all the Statutory payments but they were not designed as a vehicle for low paid workers; they were intended for use by highly paid, highly skilled contractors who used their services as an alternative to operating a single person Limited Company. They are now being used by companies wishing to avoid the responsibilities of employment and to cut costs. The proposed new legislation on travel and subsistence will mean that many workers will be going home to their families to explain that their take home pay will be reducing for the second time in just a few months. I have no doubt that those hard working families will question whether or not it is in their interest to continue working.
Surely it would be simpler and fairer for Government to legislate to remove these workers from umbrella company employment and from self-employment? We have previously suggested that the easiest solution would be to state that workers who earn, say, living wage plus 20% cannot be employed through an intermediary but must be employed direct and that those workers cannot be engaged under a fettered zero hours contract.
I have copied in Paul Dacre of the Daily Mail to this email as I believe that this proposed change in legislation will seriously impact growth in the UK and will penalise workers who should not suffer because they are prepared to travel long distances to fulfil short term contracts and that the people of Britain need to be made aware. It’s interesting to note that the large consultancies who are responsible for many Public Sector contracts will not be affected by the changes to legislation and neither will the politicians who are introducing them!
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