HMRC has wrong numbers on tax change impact says Ucatt
The government has been given duff numbers about how much its tax reforms are going to cost construction workers.
That is according to construction union Ucatt, which says a policy document produced by HM Revenue & Customs (HMRC) puts the cost of the policy change at a modest £360 per year per person. In fact, Ucatt says, it will be more than £3,000 a year.
The changes relate to the tax treatment of employees of umbrella companies, who from April 2016 will have to pay tax on their travel expenses.
Ucatt cites a recent case study that showed an average construction worker on the books of an umbrella company has £144 of weekly travel expenses. Under the new law, these expenses will then be taxed at 45% (20% income tax, plus both employees and employers national insurance contributions). This will mean a loss of £64.80 per week, or £3,369 per year.
According to Ucatt, the HMRC document estimates that 430,000 workers employed by umbrella companies or engaged by ‘employment intermediaries’ will have to pay more tax.
Ucatt national secretary Brian Rye said: “Almost half a million workers will be significantly worse off after April when this measure is introduced. For those that have to travel to several sites for their work the hit will be massive. Meanwhile umbrella companies will be allowed to continue their tax dodging ways by this Tory government. This government is government by the rich, for the rich – and wants the rest of us pay. We’re damn sure George Osborne’s travel expenses aren’t taxed.”
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This article was published on 5 Jan 2016 (last updated on 6 Jan 2016).