Press releaseThursday 31 July 2008

NEW INDUSTRY TRADE BODY TO DISCUSS EXPENSES CONSULTATION WITH TREASURY
(Issued by Mattison Public Relations)

Leading contractor services provider giant group plc, a founding member of newly-formed umbrella company trade body, the Service Providers Association (SPA), will be participating in a meeting with Treasury officials to discuss proposals by the Government which could stop contractors obtaining tax relief on travel expenses.¹

The consultation, published 21/07/08, looks at the issue of tax deductible travel expenses claimed by temporary workers operating under overarching employment contracts with umbrella companies and recruitment agencies.

Matthew Brown, Managing Director, giant group, comments: "Any move to reduce non-compliance and raise standards is to be welcomed."

He adds: "UK plc benefits from a flexible workforce. Highly skilled workers take a risk by operating as contractors, in that they do not receive from the same job security and benefits as permanent employees, so it seems quite reasonable that they should benefit from a minor tax break to offset that risk."

Kevin Barrow, Partner, from leading law firm Blake Lapthorn Tarlo Lyons, says: "The Government needs to be careful that any action it takes doesn’t push contractors towards using alternative commercial structures where the potential tax loss to the Treasury could be significantly greater."

"A large number of companies aggressively market offshore tax avoidance schemes to contractors. One such provider claims that contractors pay just 15% combined tax and National Insurance on an income of £50,000."

He adds: "Large global management consultancies, many of whom are significant suppliers to the Government, could be affected by any changes to the rules relating to expenses and temporary workplaces."

Comprising Brookson, giant group, JSA and PayStream, SPA has been formed to create an independent industry body which will act as a voice of quality service providers to the flexible labour market.

Matthew Brown says: "It is in the best interests of contractors, agencies and end users that only fully compliant organisations operate in this market and that illegitimate commercial practices are stamped out. We feel that presenting a united front through SPA is the best way of achieving that goal."

¹ Tax relief for travel expenses: temporary workers and overarching contracts:
http://www.hm-treasury.gov.uk/consultations_and_legislation/travel_expenses/consult_travel_expenses.cfm

Note: Established in 1992, giant group specialises in providing services to recruitment agencies, temporary workers, freelancers and contractors. The range of services include agency back office solutions from giant precision – timesheet management, billing, payroll, contract management, pre-employment and background checking, BACS disaster recovery – and giant umbrella payroll services where giant is the professional employer organisation employing and payrolling the temporary workers and contractors.

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