ATA Verticals Managing Director, Gary Hewett, commented, “The review of IR35 will be welcomed by many of our contractors, significantly benefitting those who wish to legitimately work for a single employer on several short term contracts.

Gary continued “The government must strive to replace it with an alternative measure that continues to prevent tax avoidance, without restricting the flexibility of the labour market, and reducing the excessive administrative load placed upon contractors”
 
Those contractors who pay themselves via their own limited company are also set to benefit from a “substantial increase in income tax personal allowance from April 2011”. Although the Liberal Democrat promise of £10,000 was scrapped under the coalition agreement, an increase to £7,500 is expected to be set down in George Osborne’s emergency budget tomorrow (22nd June).
 
For contractors already engaged in, or expecting work from, certain government projects, there could be both winners and losers. The cancellation of the National ID cards scheme and Heathrow Airport Runway could mean bad news for IT and construction contractors. On the other hand, the commitment to expanding the high-speed rail network, and new energy initiatives means that rail and engineering contractors have a more positive outlook.
 
The coalition also supports a repeal of the Working Time Directive set by the European Commission. The directive was originally set in place to tackle unhealthy workplace behaviour, and cap weekly working hours to 48. Revoking it will be more accommodating for contractors, and better support the UK’s growing flexible working culture.
 
Gary Hewett concluded “It will become clearer for contractors, once the Emergency budget is set, exactly how they stand regarding their financial situation under the new coalition. Although there may be some disadvantages, the government’s movement on tax regulation and support of flexible workers means that, overall, positive change seems to be in the pipeline”