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Most Contractors will consider quitting if they are not given a pay hike says PRISM


MOST contractors will consider quitting if they are not given a pay hike to make up for the loss of travel expenses, according to a poll.


Changes to cut travel and subsistence relief could be announced in the Chancellor’s Autumn Statement.


The research supports fears employers could be stuck with a hefty bill if they are forced to make up the shortfall, estimated to be up to £7bn.




Experts are also expecting skills shortages in some sectors, including education where schools are already in the grip of a recruitment crisis.


If George Osborne presses ahead, a massive 65 per cent of contractors quizzed said they would expect a pay increase from employers so they don’t lose out, according to the PRISM survey.


A total of 62 per cent said they would be less likely to take on assignments involving significant travel or overnight stays and 53 per cent would consider quitting contracting altogether if they were not compensated for the loss.


George Osborne’s plans will mean anyone working with someone who has the right to “supervise, direct or control” the way they work will not be able to claim travel and subsistence expenses as they do now.


But experts warn the criteria are too vague amid fears the rule will catch all workers.


Only 18 per cent of those polled would be confident they would NOT be caught by SDC.


A total of 56 per cent thought the test was too confusing to know and 26 per cent believed it would apply to them.

Crawford Temple, CEO of trade body PRISM which carried out the research, warned that the test the taxman wants to use to determine which contractors deserve travel expenses is “not fit for purpose”.


Mr Temple said: “Our figures clearly show the huge problems that will surface in recruitment as the numbers of contractors refusing to travel or quitting altogether sparks a skills shortage in our schools, hospitals and private enterprises. Contractors tell us they are just not going to stand for this stealth tax and won’t be carrying on regardless.


“The alternative is employers pay more, all because of a vague test which is not fit for purpose and takes vital expenses away from those who really need them.”

The Government is making the changes to prevent disguised employment. That is where a worker pretends to be a contractor when really they behave and are engaged like a regular employee.


Mr Temple added: “The Chancellor’s aims are laudable but many workers will be deemed to be caught by SDC who should be protected and allowed to just get on with their jobs.


“I appeal to George Osborne to see sense on this issue. There has not been enough engagement with providers or contractors, many of whom are unaware of the changes.”


PRISM, a not-for-profit membership body whose members service the needs of contractors, is running the Yes2T&S campaign in a bid to stop the changes. 

Source: Neil Millard, PRISM

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