A promise contained within this year's Autumn Statement which aims to investigate those who 'do ‘the same work but under different tax arrangements’ has been welcomed by the contracting sector.
The Association of Recruitment Consultancies, which places IT contractors in roles across the UK, said that it was in full support of the pledge, and it was "glad to see that Government accepts that there is a need [to explore] … this area."
The body also called for a “simplified and consistent tax regime” for all types of “supplied personnel."
As part of the promises within this year's statement, the Government has said that it will analyse the taxation of benefits in kind expenses as well as looking closely at employee business expenses. It also confirmed that, as of April next year, it will phase out salary sacrifices.
However, the employers’ group the Confederation of British Industry (CBI) said that phasing out salary sacrifices was not the right decision for the Government to be making: "While exempting important areas like pensions and childcare, this measure sends the wrong signal to companies wanting to invest more in employee health and wellbeing.”
The Government’s planned tightening of salary sacrifice arrangements was first suggested in the Summer Budget 2015, when it was announced that the schemes removed billions of pounds worth of revenue from the exchequer and, as a result, needed to be closely monitored.