Chancellor Betrays Contractors Over Coronavirus and IR35 Aid

Chancellor Betrays Contractors - Rishi Sunak lets them down
Chancellor Betrays Contractors - Rishi Sunak lets them down

Chancellor Betrays Contractors

The Chancellor betrays contractors in his package of measures to help the self employed. He was also very sneaky with his speech on what he would deliver to the self employed. He didn’t include the part where he says that those using PSCs and paying themselves both salary and dividends would not benefit from his measures for the self employed.

Questions on Chancellor Betrays Contractors

  1. What is being done for personal services company contractors?
  2. Why the Chancellor Betrays Contractors on coronavirus
  3. Why did Chancellor Rishi Sunak not help personal services company contractors?
  4. What does the future hold for contractors – Chancellor Betrays Contractors?

What is being done for personal services company contractors

PSC contractors appear to be just about the only group who are not getting any help from the Government over this coronavirus. They are even looking to release prisoners shortly.

When Treasury Minister, Steve Barclay, was asked what the Government were doing for the self employed a few days ago he answered that they were delaying IR35 for a year.

However, many companies, like our big banks, are continuing to blanket ban PSC contractors. The Chancellor had an opportunity to order those companies to allow contractors to use their personal services companies for another year.

He didn’t take it.

Why the Chancellor Betrays Contractors on coronavirus

The package of measures looked quite good in the Chancellor’s speech. However, it was not till afterwards that the Government added:-

“Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes”.

However, because this was not in his speech the news programmes and websites (including our own) saw the package as positive and reported it that way. It must have been deliberate to leave this bit till afterwards.

Why did Chancellor Rishi Sunak not help personal services company contractors

Chancellor Rishi Sunak could not resist a final dig at contractors. He said “If we want to benefit from state support, we must all pay in equally in future.”

You would think that PSC contractors didn’t pay any tax at all. They pay plenty – but they are to get nothing from this miserable Government and Chancellor.

And the Chancellor and Government appear to take pleasure in telling contractors “it serves you right’.

The Government keep saying that we are all in this together and we must all work together.

This obviously excludes personal services company contractors who pay themselves both salary and dividends.

What does the future hold for contractors – Chancellor Betrays Contractors

The comment about “we must all pay in equally in future” may herald yet another crackdown on personal services companies.

It looks as if this Government will not rest till virtually all contractors are paying exactly the same tax as permanent employees – but without any benefits whatsoever.

And even when the coronavirus is rampant the Government can still take time out to sock it to PSC contractors.

We’re all in this together – but some are more in it than others!

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Many private sector contractors are likely to be told by their client company either that they must operate as an off-payroll employee or join an umbrella company. It’s time to plan for that now.

They need to look at umbrellas ASAP.

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    1. I am an IT Consultant but as far as I am concerned I run a limited company. I pay myself a sensible wage and yes I do take dividends as most directors do as it is a more tax efficient and legal way of extracting money from the company.

      As a result, I think it is sensible that as an employee of a limited company I would be supported in the same manner as any other employee. I am not self employed and would not expect help from this scheme. More importantly though, I certainly would not be standing up demanding special treatment as “a contractor”. For years contractors have been telling the government “we are company owners, we are entitled to take a minimum salary, we aren’t employees”. Well I think if you have benefited from paying yourself minimum wage, minimum NI and reaped the benefits of dividend tax allowances and paying less tax because you run your own business, I think it only fair to keep the same rules now.

      No special allowances for PSCs, as they are just Ltd companies with one or two employees I am afraid.


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