Contractor sector braces for UK general election on Thursday July 4th

Rishi Sunak’s shock announcement on Wednesday of an election on July 4th will let IT contractors in every part of the UK choose their MP.

But the voting in the contractor sector has already started, with polls on LinkedIn asking, “Who will be better for the staffing industry?”

A Rectec poll offers the choice of Labour leader Sir Keir Starmer, or Mr Sunak, whose election date announcement in a rainstorm is being mocked online.

Another poll, by IR35 contract review firm Qdos asks, “Which party will serve the best interests of recruiters and the recruitment industry?”

'Lack of money for tax cuts'

The firm’s chief executive Seb Maley took to LinkedIn last week to caution contractors that Labour “aren’t necessarily known for cutting taxes”.

But it is “lack of money for tax cuts” which forced the PM to bring forward the election from later in 2024, said Mr Maley, citing press reports.

“One thing’s for sure,” he adds, “the UK’s 4.2million self-employed workers could well decide the next government.

“Any political party would be wise to bear this in mind.”

A general election announced last week to be held on Thursday July 4th 2024 doesn’t leave much time for the parties to finalise their manifestos, however.

'Not much time to finalise party manifestos'

Jo Handler, senior associate at law firm Forbes Solicitors continued her assessment:

“It will be interesting to see if Labour rows back any further from its previous proposals set out in its Employment Rights Green Paper.

“[It] would have a huge impact on employment rights such as day one unfair dismissal rights, zero hours ban, ending fire and rehire”.

'Temporary labour market is vital, but complex'

The FCSA said on Thursday that its own manifesto which sets out its policy desires on the contract labour market is “already prepared.”

“The temporary labour market is vital to the economy,” adds Chris Bryce, CEO of the Freelancer & Contractor Services Association.

“[And] the processes involved in ensuring that workers receive their full employment rights and [are] paid and taxed correctly are complex.

“[We] will play [our] part in ensuring that politicians fully understand this well-functioning market.”

Bryce also said he wants Whitehall decision-makers to “appreciate” the role that “compliant” payment intermediaries play.

He said such intermediaries – in practice umbrella companies -- contribute to “worker protection” and labour market “flexibility”.

'Furlough scheme'

In his rain-soaked speech in Downing Street announcing the election date of July 4th, Sunak braved to bring up his 2020 “furlough scheme”.

For many one-person limited companies, Sunak’s financial support during the coronavirus pandemic was slim to non-existent.

The FCSA will say if patchy covid support for PSCs is a blot on his past that the PM can or can’t recover from, in an article this week exclusively for ContractorUK.

'Kaye Adams backs IPSE's new More Recourse proposal for HMRC'

In the meantime, contractor body IPSE today launches its General Election 2024 manifesto with a proposal backed by high-profile IR35 case winner Kaye Adams.

IPSE says HMRC should be put under the watch of a Cabinet minister, to directly oversee officials and offer taxpayers “more recourse” in cases of HMRC carelessness or unfairness.

Adams, a broadcaster and TV presenter says this morning: “It is no exaggeration to say that my ten-year ordeal at the hands of HMRC has destroyed my faith in the integrity of government institutions.

“To have been pursued for ten years, at enormous personal and financial cost, and then win my case at a fourth hearing, only to receive a one-line email informing me HMRC had decided ‘not to pursue it’ felt like a huge kick in the teeth.

“No-one disagrees that HMRC have a duty to collect the ‘correct’ amount of tax but it also has a duty to behave in a ‘correct‘ manner.”

Nigel Nordone, head of tax at Qdos, today tackles whether repealing IR35 reform would represent a tax cut, exclusively for ContractorUK here.

'A future Conservative government will cut UK tax burden'

Neither the Tories nor Labour have committed to such a repeal (unlike Reform UK which has here) but the chancellor is pledging tax cuts if they remain in office.

Speaking in London to reporters on May 16th (so before Wednesday’s election date announcement), Jeremy Hunt said he could “make a very clear argument that will bring down taxes, and I can do so with credibility.”

According to City AM, an election-conscious chancellor continued:

“There is a choice that the Labour Party does not want to … cut the tax burden, a future Conservative government will.”

Hunt reportedly added a suggestion he would seek to cut taxes further in the autumn of 2024, but only if he could do so responsibly, saying:

“If we can afford to go further responsibly to reduce the double tax on work this autumn that is what I will do.”

'UK has millions of abandoned self-employed'

At Qdos, its CEO says he’s heard it all before.

“The carrot is being dangled – not the first time either,” says Mr Maley.

“The chancellor has hinted at further tax cuts if the Conservatives win the general election.

“Will this convince millions of abandoned self-employed voters that the Conservative Party is their best hope? It won’t be long before we find out.”

'Lack of proactive policy making on self-employment'

IPSE chief executive Derek Cribb on Friday accused the government of a “lack of proactive policy making catered to the millions of people who work for themselves.”

Mr Cribb also said: “The sector is bursting with potential to get more people working, plug skills gaps and grow the economy.

“But this potentially is being squandered by the devastating impact of late payments [and] careless tax enforcement.”

'UK is best country in the world to grow a business'

In his drenched election date announcement from No 10, Sunak claimed the Conservatives have “seized the opportunities of Brexit to make this the best country in the world to a grow a business.”

Out of work because he can’t find a contract, a self-employed Linux specialist took aim at what the PM has announced since -- national service for 18-year-olds.

The Linux specialist said: “There are not enough police and resources to enforce such a crazy scheme.

“And it does nothing to help out the existing self-employed; freelancers and small businesses that have been struggling since he and his predecessors got in.

“Perhaps he should fix what he has, before spending more money on schemes that are doomed to failure.”

'Is national service for 18-year-olds, a Tory election gimmick?'

A technology staffing agency boss is scratching his head at the recruitment campaign too, which would be compulsory.

“Under this plan, 18-year-olds would have the opportunity to apply for one of 30,000 full-time military placements or volunteer one weekend a month to carry out community service.

“Does it have the potential to instil valuable, transferable, skills?” asked the boss, Matt Collingwood of VIQU.

“Or is it simply a Tory gimmick?”

'Two more Budgets to come in 2024'

Meanwhile, an accountant is more concerned by the numbers which Sunak’s July 4th election date announcement throws up which could lead to even bigger financial ramifications for contractors -- twice over -- than whoever occupies No 10 on the morning of July 5th.

“[So the UK is set for a] general election on USA’s Independence day?” rhetorically asked the accountant, Juan Carlos Venegas. “Now let’s wait for two Budgets in 2024 before Christmas – one in the summer, and one in the autumn. [At least that’s] my prediction.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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