Contractors look set to benefit from this year’s Queen’s speech in a number of ways. PCG believes that: “The fact that small businesses, and flexible working, featured so heavily in the Queen’s speech today is indicative of the importance of this growing sector to the UK’s economic recovery.”
The mostly contractor-friendly measures included in the Small Business, Enterprise and Employment Bill (England and Wales) includes better access to government and public sector contracts that may enable contractors to win more public sector work.
“Making it easier for the smallest businesses, which includes self-employed people, to tender for contracts is an important step towards creating a level playing field for all businesses looking to engage with the public sector,” highlights PCG director of policy and public affairs Simon McVicker.
However, McVicker was less positive about the proposals to tackle late payments to small businesses, such as limited company contractors: “All businesses, including freelancers with bills to pay, rely on cash flow and are too often hampered by late payers. Talk of changing the ‘culture of payment’ among larger firms will only go so far in addressing the problem.
“In order for it to be effective, the Prompt Payment Code must be compulsory for large companies and it must include sanctions for the worst offenders. A ‘comply or explain’ system for payment terms is a start, but in order to stamp out the issue once and for all, more decisive action needs to be taken.”
The other measures that may impact positively on contractors include:
- A commitment to review red tape affecting small businesses
- New tax-free childcare subsidies worth up to £2,000 per year per child
- Further pension reforms providing greater choice and flexibility for contractors when choosing how to invest their pension savings
- Measures to encourage shale gas development that may lead to a surge in contractors for both energy/oil and gas contractors and construction and engineering contractors.
The Queen’s Speech also includes a National Insurance Contributions (NIC) Bill, which promises to simplify NIC payments for the self-employed but also to introduce new anti-avoidance powers for HMRC.
According to ContractorCalculator CEO Dave Chaplin, any new HMRC powers will only be further sticking plasters: “Whilst the intentions will be admirable, the government will have little chance of weaving anything substantial into the existing tax code due to the existing complexity.”
The former financial IT contractor adds: “It reminds me of an IT system that has had patch after patch after patch. It needs a re-write.”