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Fears tax change will hit Cumbria's industry

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1 February 2016 10:01AM

Workington MP Sue Hayman argues that denying contractors and freelancers the legal right to claim tax relief will result in a skills shortage as fewer workers will be willing to travel for assignments and work.

The Labour MP said: "I was shocked to discover the impact that cuts to contractors' travel and subsistence expenses may have on our local economy in west Cumbria.

"Local industry depends on contractors and temporary workers, just as our schools and hospitals. We already find it difficult to attract staff for vital services, this also would relax to help the situation."

Paul Murphy, general manger of cpa Simplyco at Dovenby near Cockermouth, warned last year that the changes will have a "disastrous" effect on plans for the nuclear new build at Sellafield.

He explained: "It takes many thousands of skilled personnel to develop a nuclear power oakley sunglasses sale clearance station. Labour at those levels can not be sourced locally and contractors from outside the area will have to be recruited.

"They are unlikely to accept assignments where they've got to pay out for travel and subsistence   including accommodation   off their own pocket should they cannot claim the tax relief.

"Even without these proposals, there's going to be lack of qualified labour. It won't take a genius to exercise that, whenever we can't get skilled contractors, we simply cannot bring projects in promptly or within budget."

HMRC argues it is unfair a permanent employee cannot claim travel and subsistence tax relief while a contractor can.

Getting rid of the relief would produce a "level playing field" and raise 265m a year in revenue for that Treasury.

The Freelancer and Contractor  Association has become campaigning against the proposals. Its chief executive, Julia Kermode, expects the progres to hit the population sector and also businesses.

She said: "Abolishing travel and subsistence relief will make it difficult for Cumbria to draw in the workforce to fill key public sector roles.

"It could mean having to pay more gain access to the skills and talent these workers provide or risk lacking the right abilities at all. It'll certainly place a strain on an already stretched Cumbrian public sector purse."

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