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Election result to have effect on contracting

Election result to have effect on contracting

The result of the upcoming snap general election is likely to have a major impact on contractors in the UK, an industry body spokesperson has warned.

A focus on employment status is likely to be a trait of the next government, regardless of which side of the political spectrum they ultimately come from.

Andy Chamberlain of the Association of Independent Professionals and the Self Employed (IPSE) has warned that the IR35 reforms, as seen in the public sector, could creep their way into the private sector.

“It’s clear there is a concern about taxation and different forms of working, and the next government will want to address these issues one way or another,” Chamberlain told Contractor Calculator.

Chamberlain warns that if the Conservative party remains in power, depending on how many seats they hold, they could take a quite radical and controversial approach when it comes to taxation and employment status.
With 4.8 million self-employed people in the UK and seats up for grabs across the country, Chamberlain believes this sector will face some attention in the run up to the election in early June.

“These are people in work who will very much have a stake in the outcome of the election,” he said. “So I do believe that we will see more and more policy proposals from all parties targeted towards the self-employed because they are a growing and incredibly important portion of the labour market.”

Though it won’t be welcomed by many, there is, according to Chamberlain, a growing fear that the IR35 reforms that have affected the public sector so badly could soon be introduced into the private sector.

“Most independent experts that we spoke to during the public sector consultation period felt that a private sector roll out would be inevitable, mainly because a two-tier tax system simply doesn’t make sense,” he said. “IPSE will be campaigning hard, pointing out the damage this is doing to the public sector, and warning of the risks to the economy if a private sector roll out were to follow.”

Chamberlain added that contractors can take certain steps to ensure that if this does come to fruition, they are in the best position possible. These include ensuring their relationship with the company they work with is strictly business-to-business, and that their contract is IR35 friendly.

“If contractors can firmly establish this now with their clients, if it comes to the point where the client is responsible for determining their status, the client should understand and easily be able to say that IR35 does not apply,” he said. “So it’s more important than ever that contractors ensure their status as a business is as clear as possible."