One of the key issues dominating the recruitment industry from a legislative point of view is the implementation of new travel and subsistence (T&S) rules taking effect on April 6th 2016, which are part of the Finance Bill 2016.
This aims to restrict workers operating via employment intermediaries from receiving tax relief on T&S expenses and it continues to be the subject of much debate as many employers are not fully familiar with the changes. When the new legislation takes effect, it effectively means that the pay taken home as a contractor may be reduced if continuing to be paid through an umbrella solution.
As employers consider the impact of this legislation, it looks like the umbrella and payroll industry will continue to lobby for change. There needs to be more engagement on this issue to bring clarity where there is confusion.
I think that more measures to incentivise visionary SMEs are needed, given that they are major catalysts for economic growth. Greater transparency is also called for on tax avoidance so that the public is reassured the Government is taking this issue seriously and reiterating that the UK is a fair and transparent tax destination for business.
It’s also highly likely that this year’s Budget will be used as a platform to tackle the issue of EU membership and it is expected that the Chancellor will be required to warn businesses of the potential economic threat posed by Brexit, given the heated discussions among the business community.