It looks as if the Government do not want senior people to become contractors. There’s now a glass ceiling for contractors.
I started off contractor at the programmer level.
I became a senior programmer then systems analyst, business analyst, project leader and the project manager followed by projects manager (plural). I got all my promotions as a contractor.
After that I became Systems Manager and then Chief Information Officer in charge of 80 people. Those promotions were all as a contractor too.
I‘m not saying that to blow my own trumpet.
I‘m saying that to show that the days of anyone doing that in future will be over according to the Government.
Contractors will have to stick close to the bottom level in the future and get older working for younger and younger managers.
Already they have brought in Controlling Persons rules in their own departments.
That states that anyone who has significant control over people and budgets would be seen as a controlling person. So, they would have to be a permanent employee.
I‘m certain that this would count me out for at least some of the later jobs I did.
However, this is completely ridiculous.
Why should someone who is quite senior not be able to decide that they want to strike out on their own?
Why should some jobs be ring fenced as only for permanent employees?
It was expected that the Government would legislate to bring Controlling Persons (wouldn‘t that be Controlling People?) in the private sector under the same rules.
It was expected in the Autumn Statement.
However, the Chancellor said they would not be bringing in Controlling Persons legislation in the private sector.
Whilst the cheers were still in contractors throats he then said that he will strengthen the existing IR35 legislation. That is ‘to put beyond doubt that it applies to office holders for tax purposes’.
He said that he would keep this under review.
In other words, if it turns out that HMRC are not able to enforce this themselves, i.e. that senior people have to be permies or contractors caught by IR35, if the courts and tribunals rule against them, then the Government will use new legislation to change the goalposts to make sure that HMRC score on this issue.
IR35 History Lesson
Remember that IR35 was brought in to stop the practice of ‘disguised employment‘. That’s where people left a company on a Friday only to come back as a contractor on the Monday?
Remember that it was not so long ago that the Conservatives were giving IPSE winks and nods over IR35. They gave them the great promise that they would ‘look at‘ IR35 again if they won. IPSE rushed out as a Press Release about just before the election?
Remember how the Tories were to ride to the rescue of contractors?
Worse than Labour
Now, the Tories, who were supposed to be riding to the rescue are now going to go further than Labour and strengthen IR35.
They should remember that there are 1.6m freelancers according to IPSE figures and 650 constituencies.
That‘s about 2,500 per constituency on average.
It’s such a shame that the Government keep hitting contractors and it is the turn of senior people now.