Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

George Osborne 'stealth tax' could cost half a million workers £1,000 each

Moves to take away tax reliefs for agency workers will hurt hundreds of thousands of construction workers, supply teachers and others

Adam Withnall
Wednesday 06 April 2016 16:17 BST
Comments
George Osborne checks food items during a visit to the Ocado Customer Fulfilment Centre in Hatfield, 6 April 2016
George Osborne checks food items during a visit to the Ocado Customer Fulfilment Centre in Hatfield, 6 April 2016

Half a million British workers could lose out on hundreds of pounds a year under a “stealth tax” coming in on Wednesday which was not announced in George Osborne’s Budget.

Union leaders said the changes would see construction workers, supply teachers and distribution centre workers, among other professions, denied the right to claim tax relief on necessary travel, food and accommodation expenses.

The rule change, among a number coming into effect on 6 April, will see the Treasury rake in an additional £150 million a year, the Government said.

But it comes at a cost to any worker employed through an “employment intermediary” such as an agency.

The construction union UCATT said the changes predominantly affected its industry, with one case seeing a worker lose as much as £3,369. All the costs will be borne by workers rather than the businesses employing them.

A spokesman for UCATT told The Independent the government had already hit agency construction workers by making them pay both the employer’s and employee’s National Insurance contributions.

The organisation has campaigned for so-called exploitative “umbrella companies” to be scrapped – instead, UCATT says, the government has moved to remove one of the few perks offsetting the tax burden on agency workers.

The Treasury estimates the change will impact 430,000 workers across all industries, which UCATT called a “serious understatement”. It said the government announced the move quietly in a “formal statement” following consultation, rather than in the Budget or Autumn Statement.

Brian Rye, the union’s acting general secretary, 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.

“Once again this shows how this Conservative Government is making workers suffer, while giving a free pass to their friends in business.”

The Treasury is yet to respond to a request from The Independent for comment.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in