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Hammond must support UK contractors

Hammond must support UK contractors

This week sees the UK’s chancellor of the exchequer Phillip Hammond make his first Autumn Statement. A major date in the financial year, the statement will be the first delivered by Hammond after he took over from George Osborne earlier this year.

Following the Brexit vote, the statement is one of the most eagerly anticipated in recent times. And ahead of the ‘big reveal’, the chancellor is being implored to remember the importance of the UK’s contractor, temporary and freelance workforce.

Accounting company Danbro is being vocal when it comes to ensuring this portion of the UK workforce are protected and supported in the Autumn Statement.

Danbro’s managing director Damian Broughton wrote in a statement: “UK PLC has been under an immense amount of pressure in recent years and that looks set to continue in light of events ranging from the Brexit vote to Donald Trump being elected as the 45th President of the United States. Despite these global pressures, the UK has proved to be resilient and we consistently recover from dips in the economy faster than most of our partner nations. This is because we have been able to utilise our powerful temporary workforce.”

The statement called for the government to have a modern approach that is in touch with today’s way of working.

“The UK has an army of contractors, consultants, freelancers and other self-employed people who deliver the expertise our core industries need on a temporary basis,” Broughton writes. “This army of almost five million freelance workers want to operate in this way. It delivers them the freedom they desire, enhances their skills and experiences and allows them to operate in a more tax efficient manner.”

The much-maligned and controversial IR35 reforms in the public sector were also addressed, and identified as having the potential to drive away of vast numbers of workers from the public sector.

“Arguably, this sector (public sector) needs temporary expertise more than most,” Broughton says. “HMRC claims around 20,000 people will be caught up by these new rules but our partners say that figure is much higher and could potentially represent 10% of the entire public sector workforce.”

Broughton also says key issue around the reforms as being the level of complexity involved, and indicates that ‘far more will assume they are caught by these rules than will actually be the case’.

“The proposed HMRC tool for people to use will be onerous at best,” he writes. “We need to see clear definitions and far simpler tests if these proposals are to go ahead. There is a huge amount of confusion and, if the reforms are pushed through, we will see a big impact on public sector services.”

Broughton concludes by expressing his belief that the Brexit vote will inevitably have a major impact on this year’s statement, and predict sweeping changes as a result. He does however say that isolating sections of the UK workforce, such as contractors and temporary workers, will only have a detrimental effect long term.

“Following Brexit, (Hammond’s) top priority will be to attract new businesses to the UK and deliver incentives for our existing businesses to remain in this country,” Broughton writes. “If Phillip Hammond changes key things like basic tax and VAT, he will bring the UK population along with him and he will be able to steer us out of a potential downturn when the Brexit process gets underway. However, he can’t risk penalising entrepreneurs and that should mean we see a range of business-friendly policies that will bolster the economy ahead of a lengthy Brexit battle.”

The 2016 Autumn Statement will be released on Wednesday 23 November.