Umbrella contractors may be pleasantly surprised by the potential benefits of the Conservative and Liberal coalition government that is now officially in power. As the initial details are beginning to be revealed regarding taxation, the economy and legislation the future looks a little brighter for contractors.
The newly appointed Chancellor of the Exchequer, George Osborne has already voiced his belief in a ‘fairer tax’ system whilst Vince Cable, now the Business Secretary, has backed suggestions that the notorious IR35 legislation should be repealed. This can only be good news for contractors who are looking for legislation that is both fair and transparent, especially for agency workers and contractors.
Three examples of legislation that has not been successful are the IR35 legislation, the Agency Workers Directive and the Managed Service Company legislation which have not supported the highly skilled portion of the jobs market. There is now scope for the newly formed coalition government to set about implementation of a new legislation that will protect the agency workers and contractors who could be vulnerable as well as offering valuable support to the genuinely self employed workers.
It has already been revealed that the Liberal’s tax free threshold of £10,000 will be honoured whilst the 1% national insurance rise planned by the Labour government will be reduced.
One thing that is certain is that the public deficit will have to be tackled, which will mean a reduction in spending. Contractors will be waiting eagerly to discover whether the new government will be making any moves to change the IR35 rules or even to scrap the legislation altogether.
Umbrella companies and agencies will welcome the promise by the Conservative-Liberal government to review existing legislation in the hope that future change will bring real benefits for contractors.
