Why UK Contractors Have No Friends

Conservatives and UK Contractors
Conservatives threat to UK Contractoring profession

Contractors Have No Friends


You would have thought that New Labour would have been the friends of UK contractors.

You would have thought that they would want to attract the hundreds of thousands of small businessmen and women to their ranks.

Many contractors were the children of working class parents who had now become professionals.

UK Contractors and the Conservatives

You would have thought that the Conservatives would have been friends of UK Contractors.

Indeed the Professional Contractors Group did.

After all, they were small, independent, risk-taking businessmen and women.

You would have thought that the Connservative party would have embraced them.

Threat to UK Contractors

Indeed, they did, prior to the 2010 election.

When they got in it was very different, culminating now in an existential threat to the whole contracting profession.

So, why did New Labour not see contractors as ‘one of us’?

New Labour wanted to expand their base. There was no longer enough working class people to vote them in.

Many children of working class parents were now professionals, or middle class, but still identified with Labour – especially New Labour.

New Labour and Contractors

However, New Labour didn’t identify with them.

New Labour did try to attract more of the new professional classes – but it was those in permanent employment that they targeted.

They might see IT professionals as targets for New Labour.

IR35 Legislation

However, they just saw contractors as tax avoiders and some of them as disguised employees.

That’s why they brought in the nefarious IR35 which changed everything in the contracting profession.

That’s why they allowed tens of thousands of IT professionals from outside the UK to come and work in the UK on Fast Track Visas.

Most of those came to work in IT.

Replacing UK Contractors With Cheaper Foreign IT Professionals

One of their Minsiters, I think it was Dawn Primorolo, once went to India and told them that the UK needed 300,000 more IT workers.

Of course, they were in direct competition with UK Contractors – but were much cheaper.

Another New Labour Minister, I can’t remember her name, said in Parliament that the choice for companies was whether they wanted a permanent employee or a contractor.

If they wanted a permanent employee, and couldn’t get one in Britain, they could take one from abroad rather than take a UK contractor instead.

Of course many of those coming from abroad were simply cheaper than UK IT workers.

Cheap Foreign IT Professionals

They were supposed to come in at the same rate as UK permanent employees but this was very poorly policed and Government civil servants who monitored this were no match for UK companies and consultancies who wanted cheap IT workers.

Then New Labour brought in IR35 in 1999 to catch ‘disguised employees’, i.e those who quit permanent jobs on the Friday to do the same job with the company on the Monday but as a contractor.

However, it caught many contractors in its net that New Labour admitted were not intended, i.e. contractors who had been operating as contractors for years.

However, they didn’t change the law.

So, I think we can see the attitude of New Labour to UK contractors.

They saw them as ‘not one of us’.

Conservatives and Contractors as Allies?

So, surely the Conservatives would see these small businessmen and women as ‘one of them’.

Before the 2010 election they did.

Indeed, the PCG (IPSE) rushed out a Press Release to tell all contractors that the cavalry were arriving. The Conservatives had promised them that they would look at IR35 again.

The PCG seemed to think it was great coup.

ITContractor.com said at the time that the Conservatives had promised nothing concrete over IR35 except to ‘look at’ it again.

Conservative Con on Contractors

Of course, we know what happened after they got elected.

They decide to keep IR35 after all.

Indeed, contractor-hating Chancellor Osborne said that they would go further than New Labour. They were going to STRENGHEN IR35.

While laying off 10,000 HMRC workers they hired a Complianc Team of 36 IR35 officers based in Croydon, Salford and Edninburgh.

No More Travel and Subsistence Expenses

He then announced that they were going to take away the opportunity for umbrella company contractors and personal service company contractors to claim travel and subsistence expenses against tax.

This is the najor expense that umbrella companies ontractors could claim.

Without this it was hardly worth them paying the monthly fee to umbrella companies basically just for paying them.

This was bad enough.

Worst Threat to UK Contractors

However, this week signalled the potentially worst month ever for the contracting profession – much worse than when IR35 was brought in.

According the Guardian and Mail this week (and they must have been briefed by Treasury Officials working for Osborne) that any contractor working for a company for more than a month, i.e. all contractors, would have to go on the payroll of companies.

They woould mo longer be able to go through intermediaries, i.e. umbrella companies or personal service companies.

Many companies would no longer be pepared to take on contractors on that basis.

Conservatives Attacking Contracting Profession

So, why are the Conservatives doing this?

Surely they would be supportive to risk-taking small businessmen and women?

That’s what the PCG /IPSE thought when they rushed out that infamous Press Release just before the 2010 election.

This is viewed now as the equivalent of Chamberlain’s ‘Peace In Our Time’ piece of paper in he contracting profession.

However, we now have our answer to what the Conservatives think of us.

Contractors on the Outside

Like New Labour, they don’t see us as ‘one of us’ the way they see those who run major companies and hedge funds, or high net worth individuals, who use offshore trusts as ‘one of us’.

This has come as a shock to PCG / IPSE who backed this horse.

Unfortunately neithr Labour (especially since the New was dropped) nor the Conservatives see UK contractors as ‘one of us’ or as amongst either their core support or those that they want to reach out to.

The Conservatives just see us as oiks who they managed to convince to vote for them in at the 2010 election, or, even worse, as a tax avoiding profession.

All Contractors Are Tax Avoiders

They don’t mean just those using offshore umbrella companies but those in personal service companies and even those in umbrella companeis with the pittance of xspenses that they can offset against tax.

So, UK contractors are on the outside of both major parties.

UK Contractors have no friends.

All we’ve got is the PCG / IPSE.

God help us in the days ahead!

Limited Partnerships for Contractors

With Umbrella Companies and Personal Service Companies being attacked by the Chancellor, the new kid on the block could be Limited Partnerships.

Find out more by clicking on Limited Partnerships for Contractors where contractors can retain 85% of their income.



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