Expenses schemes steal from workers and taxpayers, says Connarty
29 November 2012
The MP leading a campaign to get rid of travel & subsistence (T&S) expenses schemes in the recruitment industry has told Recruiter that such schemes are stealing from workers and the taxpayer.
Thu, 29 Nov 2012
The MP leading a campaign to get rid of travel & subsistence (T&S) expenses schemes in the recruitment industry has told Recruiter that such schemes are stealing from workers and the taxpayer.
Michael Connarty, Labour MP for Linlithgow and East Falkirk (pictured right), who last week led a group of five MPs to produce an Early Day Motion on T&S schemes says: “To take this [expenses paid to workers for T&S] out of the minimum wage and not pay tax and NI [national insurance] on it is not only stealing from the worker, but is also stealing from the people on the basis that these taxes are required to pay for services.”
Critics of such schemes say the benefits of the tax relief are not shared fairly with the workers, with the company operating the scheme pocketing the lion’s share of tax and NI savings, and pushing workers’ wages below minimum wage levels.
However, Connarty says he is opposed to all schemes where employers gain tax relief, even when workers are not being paid at minimum wage levels. “I think it has to be raised with HMRC because it is a way of avoiding tax,” he says.
Connarty rejects the argument that outlawing T&S schemes will increase the cost of employing temporary workers and cost jobs, describing such views as “economically unsound”.
“People said the National Minimum Wage [NMW] would cost 1m jobs and it didn’t,” he adds.
The MP says he first became aware of the issue a month ago, when he received a briefing from the Unite trade union. However, the MP, who played a key role in the successful three-year long campaign to have restaurant workers’ tips included in their wages, describes the Early Day Motion as only the start. “For me this is a war of attrition, this is just the beginning.”
The MP leading a campaign to get rid of travel & subsistence (T&S) expenses schemes in the recruitment industry has told Recruiter that such schemes are stealing from workers and the taxpayer.
Michael Connarty, Labour MP for Linlithgow and East Falkirk (pictured right), who last week led a group of five MPs to produce an Early Day Motion on T&S schemes says: “To take this [expenses paid to workers for T&S] out of the minimum wage and not pay tax and NI [national insurance] on it is not only stealing from the worker, but is also stealing from the people on the basis that these taxes are required to pay for services.”
Critics of such schemes say the benefits of the tax relief are not shared fairly with the workers, with the company operating the scheme pocketing the lion’s share of tax and NI savings, and pushing workers’ wages below minimum wage levels.
However, Connarty says he is opposed to all schemes where employers gain tax relief, even when workers are not being paid at minimum wage levels. “I think it has to be raised with HMRC because it is a way of avoiding tax,” he says.
Connarty rejects the argument that outlawing T&S schemes will increase the cost of employing temporary workers and cost jobs, describing such views as “economically unsound”.
“People said the National Minimum Wage [NMW] would cost 1m jobs and it didn’t,” he adds.
The MP says he first became aware of the issue a month ago, when he received a briefing from the Unite trade union. However, the MP, who played a key role in the successful three-year long campaign to have restaurant workers’ tips included in their wages, describes the Early Day Motion as only the start. “For me this is a war of attrition, this is just the beginning.”
