Chancellor closes umbrella companies’ loophole… to prevent taxpayers claiming work expenses.
Not the kind of action that UCATT have been advocating. The construction workers Trade Union has been campaigning against the existence of umbrella companies because they allow employment situations that are detrimental to their employees. Umbrella companies classify many workers as ‘self-employed’; saving them money on pensions, sick pay and holiday pay.
What the government say
But instead of tackling these issues, Chancellor George Osborne has decided to close a loophole that will earn the Treasury an estimated £150 million every year. But it will cost thousands of taxpayers and average of £1,000 per year in lost tax relief. If you are employed by an umbrella company you will no longer be able to claim tax relief for expenses like food, overnight accommodation or travel. No wonder the media have nicknamed it the ‘Stealth Tax’!
The cost
This will be sorely felt by construction industry workers and UCATT (Union of Construction Allied Trades and Technicians) have calculated that some individuals will lose as much as £3,369 annually. It’s Acting General Secretary, Brian Rye, said: “This is an absolute kick in the teeth for construction workers who are already being forced to work under the exploitative yoke of umbrella companies and employment agencies.
All of the additional costs will be met by the workers and the employers businesses will be entirely unaffected.
Some good news
A claim for a tax rebate can still be made for many of the costs previously covered by the umbrella scheme.
Tax Rebate Services has experts on hand to help both employed and self employed construction workers. We can help you reclaim everything you are entitled to and make sure you only pay the tax you need to.
