Clause 38 - Provision of services through an intermediary: minor amendments
Finance Bill
5:30 pm
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
The hon. Gentleman misunderstands the service company arrangements that were put in place last year. The purpose of the changes was to ensure that an individual who was an employee of the service company received all the rights of an employee. We wanted to prevent an individual
from trying to get all the benefits of an employee and then, when they were clearly working in another company, receiving all those benefits too. We said, ''No, you can't have both. You must be one or the other.''
The clause goes further and includes other reliefs, such as personal incidental expenses and qualifying child care. I am happy to confirm that, for want of a better way of putting it, IR35 workers can claim personal incidental expenses in the same way as a direct employee if they are direct employees and working for the service company.
The Chartered Institute of Taxation has also suggested that we might want to consider giving relief for appropriate child care cost. It is certainly a suggestion that the Government are prepared to examine in their wider consideration of child care costs. On the partnership asset issue, our view is that it is a hypothetical problem that has been put to us without demonstrating that it actually exists. Until it is demonstrated that there is a problem that needs to be addressed, as opposed to a hypothetical problem, why should we take up space in Finance Bills to deal with it?
The rights of employees in service companies are the same and those employees have the same access as any others. All we want is for them to choose which they
are, rather than claim that they are both. I hope that I have reassured the hon. Gentleman that the Government have absolutely no intention of preventing employees of service companies from getting access to all the rights that any employee would have.