Political Parties and Contractors
So, which of the political parties would be best for UK Contractors?
Which one should they vote for if they wanted conditions to be better for them and their fellow contractors?
Three parties, the Conservatives, Labour and the LibDems, have all been in power, or in coalition, over the past decade.
So, now is the time to assess what they have done, or not done, for us.
Of course, one of the big problems has been that the main contractors group, IPSE (ex-PCG) has not been effective enough as a lobbying group.
It has been too easy for the Conservatives, especially, to pull the wool over their eyes.
Let’s have a look at the various parties and what they have done for us.
Labour Party (New or Old)
They brought in IR35 which has been a big curse on contractors who, almost to a man (or woman), operated through limited companies prior to that.
The press exposed the scandal of disguised employees. They came about through companies laying off employees on the Friday and re-employing them as contractors on the Monday.
The new ‘contractors’ did exactly the same jobs as before, at the same desk and in the same teams.
Tax Avoidance
When you see something like this happening you just know it is a tax scam – and so it was.
The companis no longer had the responsibility of paying the tax and the National Insurance for the contractors and could fire them more easily in a downturn.
The new ‘contractors’ were able to operate through limited companies and offset all sorts of things against tax.
When there is a scandal in the press, politicians always feel that they have to act – and so they did.
IR35 Legislation
They brought in the IR35 legislation. As we know, it brought far more than the ‘disguised employees’ within its nets. Contractors who had been operating for years were entangled in its nets too.
Much time and money has been expended since, working out, contractor by contractor, whether they are in a ‘contract for services’ or in a ‘contract of service’. The first is considered to be a proper contractor and the second a disguised employee.
Fast Track Visas
New Labour also brought in the Fast Track Visa to help those from outside the EU to come and work in Britain.
It enabled employers to bring in loads of cheap IT labour undercutting the market here.
They shouldn’t be cheaper but clever (and greedy) companies in the commercial sector can always outwit Government civil servant ‘enforcers’.
They showed little willingness to enforce anyway.
It used to be that if comapnies couldn’t get emough permanent employees they would turn to the UK contract market to fill the gap till they could find them.
Beverley Hughes and UK Contractors
Labour Employment Minsiter, Beverley Hughes, stated in Parliament that this had changed.
She said that the decisions they now could make was whether they wanted a permanent employee or a contractor.
If it is a permanent employee that they want and couldn’t get one in the UK with the right skills, they could take one from outside the EU before taking a UK contractor.
Conservative Party and Contractors
The Tories were very devious over their supposed support for contractors before the 2010 election. They gave winks and nods to the PCG (now IPSE) before the 2010 election that they would abolish IR35.
Of couse, they didn’t actually say that as such. What they said was that they would ‘look at’ IR35 again.
The PCG were so delighted that they rushed out a Press Release, just before the election, with the great news that their lobbying had got a review of IR35.
How important they must have felt then.
Conservatives Promised Nothing
Of course, as we pointed out at the time, the Conservatives had actually promised nothing on paper – never mind the hints that they may have made in private.
However,, the PCG wanted so much to believe that their lobbying efforts had led to success for contractors that they were easy to stitch up anyway.
The promises turned out to be like the prophesies of the three witches to Macbeth.
Conservatives Looked at IR35 Again
The Conservatives, when they got into power, did have a look at IR35 again.
However, ‘look at’ was all they promised.
They promptly decided that they would keep IR35.
The danger for them, as they said, was of 200,000 umbrella company contractors going back to their limited companies again.
This would cost the Treasury around £2bn a year when they were looking to make Austerity Cuts.
Anyone who thought that the Conservatives were going to give a massive tax break to people earning £100,000 a year had to be confused anyway.
Conservatives Strengthened IR35
It was even worse.
Chancellor Osborne said that the Conservatives would STRENGTHEN IR35 and he was as good as his word.
He recruited a team of 36 IR35 Compliance Officers in Edinburgh, Croydon and Salford, to hunt down contractors for IR35 tax.
Umbrella Company contractors thought that they were safe. That’s why many of them are in umbrellas anyway as they are risk averse even if not caught by IR35.
However, the Conservatives then took away the ability of Umbrella Company contractors to be able to claim Travel and Subsistence aganst tax when they worked away from home.
See All Contractors as Tax Avoiders
This shows that they see all contractors as tax avoiders.
Although, they see tax avoidance as not a problem when it comes to themselves, their relatives and their donors, they see tax avidance as not for the likes of contractors.
Osborne also made it far more difficult for contractors in the public sector to continue their careers.
If anyone else, like IPSE, thought that the Conservatives were going to rescue them from Labour, they were sadly mistaken.
As regards contractors, the Conservatives were Labour ++ when it came to doing them down.
LibDems and Contractors
It’s difficult to say what they would do when in power as they haven’t been in power by themselves.
They have always been sympathetic to contractors. But then so were the Tories before they came to power.
The only thing that we have to go on was when they were in partial power during the Coalition.
They were there when the Government decided not to abolish IR35 but to strengthen it.
Of course, they were the junior memebrs in that Coalition. Indeed they probably got punished a bit unfairly by the electorate for being part of it when they were just junior members.
However, when the Coalition negotiations took place prior to them forming it, the LibDems set out their priorities, i.e. things that they definitely wanted if they were to form a Coalition.
It is safe to say that abolishing IR35 was not one of their priorities.
It was not something they asked for.
UKIP and Contractors
God knows.
I haven’t a clue what their policy on IR35 would be.
Of course, it would be highly likely that there would be a lot fewer people coming in from outside the UK with Work Permits to take contractors jobs.
Once again, it is fair to say that we have these problems bcause we lack an effective lobbying force.
It needs someone to say to the parties, “Here is our agenda. Here is what contractors want. We will recommend the party that comes up with the best offer to contractors.”
Needless to say these would need to be hard and fast promises and not air-fairy promises to ‘look at’ existing legislation again.
So, putting aside your own personal preferences, which of the political parties do you think would be best for contractors?
Which of the political parties would you vote for next time if you were judging purely on contractor issues?
