Freelancers and contractors have been left disappointed by the Chancellor’s pre-budget report. In fact the sector has once again been left feeling irrelevant despite the important part that contractors will play in the recovery of the economy.
There had been hope that the PBR would promise to repeal the controversial IR35 rule but this did not happen. Contractor accountant, Brookson, fear that the Chancellor missed an opportunity with their managing director, Martin Hesketh, stating: “It is fair to say that the 2009 Pre-Budget Report has been another missed opportunity for the flexible workforce. Initially, there seems to be very little in the report which supports self-employed professionals. Yet again this shows the failure of the Government to recognise the value of this population as the economy strives to recover from the recession. As usual though, there is a lot of work to be done to examine the detail in the report to ensure that there are no major implications for the contracting market within the detailed documentation.”
He continued: “While the Chancellor did refer to the flexible workforce in his speech, little direct support has been proposed. A number of provisions have been announced to support a number of key industries, including digital, bio and low-carbon technology, to help generate both growth and revenue over the coming years. This can, however, only be seen as a potential opportunity for those operating within these sectors, which are heavily populated by self-employed professionals.”
The PCG were also in agreement that despite the Chancellor constantly referring to fairness throughout his speech, the report was actually far from fair to contractors.
John Brazier, PCG managing director, stated: “The Chancellor claimed that the UK has the most flexible labour market in Europe and yet the iniquitous IR35 was not abolished, and a categorical commitment to drop the ‘Income Shifting’ proposals was not in the PBR. This directly hinders freelancers in their work and makes the economy less flexible. PCG firmly believes that increasingly flexible labour markets are essential to get the UK out of this very deep recession.”
He concluded: “There was a lot of talk by the Chancellor about fairness, however this PBR has failed the fairness test for the UK’s 1.4m knowledge based freelancers. IR35 was not abolished, NICs are to go up in 2011, by double what he previously said and the only crumb of comfort is that the small business corporation tax rate rise is to be deferred. The borrowing figures are huge and the public expenditure cuts in years to come are bound to be savage, affecting all sectors of the economy and ordinary people.”