I appreciate your concerns on the rumours regarding changes that would force contractors who worked for a company for more than one month onto the payroll, turning them into pay as you earn employees. As you may be aware, the Autumn Statement has now been delivered and no such plans have been announced. I am, however, advised that the Government will not comment on speculation ahead of the publication of the consultation into existing intermediaries legislation (IR35).
The Government has recently carried out a discussions with stakeholders on how to improve the effectiveness of the existing IR35 legislation, with the objective to find a solution that protects the Exchequer and improves fairness in the system without creating disproportionate burdens on business.
As confirmed at Summer Budget 2015, the Government will legislate to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company. Following consultation, relief will be restricted for individuals working through personal service companies where the intermediaries legislation applies.
The Government recognises that many individuals choose to work through their own limited companies and appreciates the positive contribution to the economy of those who choose to work for themselves. However, the Government is committed to tackling tax avoidance and evasion at all levels to ensure everyone pays the right tax at the right time. Avoidance (and evasion) damages the effectiveness of the tax system and imposes additional costs on all taxpayers.