Impending amendments to the IR35 taxation class are causing grief for genuine contracting/sub-contracting businesses across the UK. I have noticed that very few contract positions are being advertised and it appears this is due to IR35 changes introduced by the HMRC.
So, what’s happened?
It has become apparent that yet again the HMRC has not thought through their latest piece of legislation which will no doubt have a knock-on effect throughout the UK’s business world. Most UK businesses are reliant upon the smooth running of their IT systems with ongoing security assessment and threat prevention being at the forefront of business development. Consultants and other contractors are brought in from the outside in order to provide their expertise and to carry the businesses forward with their projects. New legislation will render these consultant company roles as untenable and as a result will force the closure of many consultant companies, and as a result cause hardship and increased unemployment. A further result of this would be that there are insufficient resources for companies to call upon for their projects and maintenance of their existing systems.
Permanent Employment ‘no option’
One area we have first hand knowledge and experience of is companies taking on permanent staff purely for the purpose of filling a temporary role, subsequently relieving them of their duties after a 3 month period. This of course is unethical but nonetheless has happened, is happening now, and will no doubt become more regular in the near future.
MP’s responses …
I contacted our MP for Corby Tom Pursglove several days ago and eventually had a response to say that he would respond in full in due course. I am still awaiting the outcome of this but will publish when received. I have also contacted Boris Johnson directly about the issues surrounding the tax legislation and the impact upon businesses both in the public and private sectors to include the NHS who do employ a vast number of contract staff, and guess what? I have received no response from Boris whatsoever. Obviously if I do get a response I shall also publish it here.
Perks of being a contractor
It seems the new legislation is designed to force contract staff to pay the same amount of tax as a permanent employee and yet without all the perks such as regular employment, paid holiday, training (for which a contractor has to pay for themselves), no attendance permitted to staff meetings, business celebrations, paid bank holidays, or even the works Christmas do!
More as the story unfolds ….