Contractors have five more years of the Conservatives in government. This time, though, having won a majority in the General Election, there is no Coalition partner to constantly appease.
Should we rejoice that the UK’s pro-business party won? Will the Conservative party take the opportunity as a majority party to rein in all the red tape that is slowly strangling and stifling the UK’s flexible, self-employed workforce?
Or does this mean five more years of further new tax legislation and cumbersome rules?
The manifesto and pre-election pledges give us little to go on, partly because they were not that explicit on the subject of contractors and the self-employed. But also because these promises are rapidly forgotten once the election victor is safely confirmed in place.
Plus some of the promises, such as pledging to increase the personal allowance to £12,500, were clearly made in anticipation of a potential extension of the Coalition, to please the anticipated Liberal Democrat partners. What chance is there now of these promises being kept?
However, in some respects nothing has changed. With the exception of Danny Alexander, the team in place at the Treasury is much the same, with George Osborne confirmed as Chancellor. Prime Minister David Cameron has made some changes to his cabinet and the top team at the Treasury with the departure of former Liberal Democrat colleagues, but certainly the civil servants leading the policy direction and discussions at HMRC and the Treasury have not changed.
Were such policy blunders as refusing to abolish IR35 despite overwhelming evidence that it should go, the Business Entity Tests and other IR35 measures, the off-payroll rules, the BBC’s employment test, the Employment Intermediaries (False Self-Employment) legislation and reporting rules and the current expenses consultation all the fault of the Liberal Democrat partners in the Treasury? It’s unlikely.
There is still a desperate need to tax revenue – that has not changed. There were pre-election promises to freeze income tax, NICs and VAT, so where is the money to come from to create a surplus? Clamping down on contractor expenses? Tackling tax avoidance and sweeping up contractors as collateral damage?
On the flip side, the Association of Independent Professionals and the Self-Employed (IPSE) has already reiterated the excellent relationship it has with the Conservatives, and highlights that the party was responsible for the appointment of an ambassador to the self-employed, David Morris.
In their small business manifesto, the Conservatives pledged to cut £10bn of red tape, raise the National Insurance Contributions (NICs) thresholds and to remove complex reliefs. Issues with maternity pay and pensions for the self-employed will also be addressed.
These measures should benefit contractors, if implemented. There are a range of other measures related to employment, funding and business rates that won’t be of benefit to contractors, unless a they plan to grow their business.
So, will our new Conservative Government continue with similar heavy legislation against the contracting community as they have done over the past five years? Or will the party for business extend its largesse to the UK’s smallest of companies as it traditionally has done for the largest? We’ll find out in the coming weeks and months.