Abolish Contracting Profession
According to today’s Times newspaper, Theresa May intends to abolish contracting profession in June.
It is then when she gets the report that Matthew Taylor is now compiling on contractors and contracting.
It seems that Mrs. May knows much of what will be in it and backs it to the hilt.
National Insurance Increase for Contractors
The first instalment of it was to increase National Insurance for contractors.
So, we can get a flavour here of the tone.
They took this out of the Finance Bill after pressure from backbenchers as it was not in the Conservative Manifesto.
Taylor says that he is disappointed that the Government took it out.
Much Stricter Rules on Self Employment
The report is going to recommend much stricter rules governing what is self-employment.
It seems that they will ban employers now from having ‘control’ over freelance workers.
They say that a freelancer will no longer be able to do a job that a permanent person previously did.
So, they are basically going to define the role and say whether it is inside or outside IR35.
IT Sector the Main problem
They say that the problems arise mainly in the technology and delivery sectors but it is spreading.
This will affect the majority of IT contractors. Most of them come in to work on projects alongside permanent colleagues doing similar work to them.
The Government will no longer allow this.
These are what IPSE used to refer to derogatorily as bums-on-seats contractors.
Lack of Control on Contractors
In future, companies will have no control over the work done by what the Government sees as genuine contractors.
They will not allow them to give contractors the specification, tell them what to do or monitor their progress on a weekly basis as if they are an employee.
When a company, currently, wants to create a new computer system they decide how many permanent staff they will need going forward after the project is over.
They hire extra ones if need be.
Then they take on contractors for the rest of the work on the project.
They can get rid of them easily when the project is over. They won’t need them all then.
Similar Work to Employees
The bulk of the contractors will be doing similar work to the permanent staff on the project.
This is how the majority of IT freelancers operate.
Indeed, the estimate is that 90% of freelancers operate in this way.
It seems that the Government will no longer let them do this in future.
The company, through its project managers and project leaders, have control over what these contractors do.
These measures will surely abolish contracting profession as we know it and leave just a small percentage of current contractors.
Matthew Taylor’s Final Report
Matthey Taylor’s final report will get to Theresa May in June. The word is that she will act on its recommendations.
The report is going to say that companies are abusing the law by taking on supposedly self-employed workers for jobs that are normally done by permanent employees.
Companies are doing this to avoid paying sickness benefit, holiday pay, pension and maternity benefits.
Forced to Incorporate
The report is going to say that they are unearthing evidence that shows companies telling people to incorporate rather than taking them on the payroll.
This is arrant nonsense. How many contractors do any readers know who wanted to take a permanent job but were coerced into becoming contractors and incorporating by client companies.
This is not normally how it happens at all, although I’m sure you might find the odd case of it happening.
Providing State Benefits
Matthew Taylor wants to provide state benefits to contractors such as sick pay, social security and maternity leave.
However, it seems that this is the part of the report least likely to be implemented.
I wonder why!
Stricter Definition of Self-Employment
It seems that there is going to be a new, more clearly defined, definition of self-employment.
It also seems that this will be much stricter than now.
If this report gets implemented, most current contractors will be under threat.
Government Don’t Know What They Are Doing
I don’t think the Government knows how contracting operates.
Why should companies take on a lot of new permanent staff when they only need them for a short time, i.e. when there is a new major project?
That is where contractors come in.
Their hiring is flexible and they will go when the project is implemented and staffing levels ramp down.
The fact that they are doing a similar job to permanent staff shouldn’t matter.
Contractors have just got over the budget.
Now they have this ridiculous report in June to ‘look forward’ to.
When, and where, will this all end.
Government attacks on contractors just seem endless and interminable.
It looks like they want to abolish contracting profession for good.
Perhaps they will allow contractors to continue contracting but through umbrella companies rather than PSCs.
Where’s IPSE in all this?
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