Contractors are recognised for playing a vital role in helping businesses survive through the recession in a new report from the Recruitment and Employment Confederation (REC).
And REC says that the government should recognise that flexible labour markets need broader support than simply family friendly policies. Its tax systems should encourage increased flexibility, not create barriers, such as those facing contractors in the proposed controlling persons legislation and IR35.
These are just some of the recommendations of REC’s Flexible Work Commission Report, which also calls for the Office for National Statistics (ONS) to “dramatically expand” the data it collects on flexible workers, including monitoring Limited company contractors.
“A wider understanding of flexible work needs to be adopted by government to help move the debate beyond the current focus on family friendly working practices,” says REC chief executive Kevin Green. “Part-time working, contracting and other flexible solutions have been a significant factor in keeping people in work and companies in business during this recession.”
Based on evidence from 29 business and employer bodies from the UK and abroad, the report highlights how the adoption of flexible working practices has created the second most flexible labour market in Europe, after Denmark.
But significant regulatory barriers still exist, as the REC commission’s chair David Frost explains: “There [is] a concern that government, by constantly tampering and adding to employment legislation, is simply getting in the way of the real changes that are already taking place in the workplace.
“Global competitive pressures are remorseless and for businesses to survive and grow they have to continually examine their operations. Labour market ?exibility gives them the ability to have much greater control of costs.”
Alongside calls to scrap the controlling persons legislation proposals, the report also highlights how the tax landscape, and IR35 specifically, for contractors has gone backwards, harming UK prospects for entrepreneurialism and growth. “Despite initial positive noises from the government,” it says, “they now seem to be moving in the opposite direction.”
Green concludes: “The UK has a competitive advantage in its flexible labour market and by enhancing and promoting the benefits of flexibility to all, we can leverage this advantage to create more, and better, jobs in the UK.”