PCG compiles Autumn Statement wish list

Wednesday 27 November 2013

Professional Contractors’ Group (PCG) has written to George Osborne setting out how he can use the Autumn Statement to benefit contractors and freelancers.

As the second most significant announcement of the year after the Budget Statement, which is usually given in the spring, the Autumn Statement sets out the government’s financial priorities for the coming months. Ahead of the chancellor taking to the dispatch box on December 5th, PCG chair Julie Stewart has called on Mr Osborne to lighten the load on self-employed professionals by rethinking existing legislation and improving technological infrastructure.

For example, she refers to the government’s claims that it is committed to enabling small businesses to perform and calls on the chancellor to extend funding for broadband in rural areas, as well as incentives for mobile network operators to expand their 4G coverage. Freedom to work remotely and flexibly is vital for businesses seeking to grow, as well as being a vital feature of freelancing. Extra investment in this area would therefore directly benefit the freelance workforce, Ms Stewart writes.

However, late payment within supply chains is also a significant issue, she explains. Freelancers are often paid last by larger businesses, Ms Stewart says, calling for legal tools to be introduce allowing small businesses to chase late payment. Recently PCG called on the government to rethink its plans for a whistleblowing hotline allowing small businesses to name and shame late payers. The organisation urged Whitehall to make the telephone line anonymous, explaining that many contractors will not wish to be identified out of fear they could lose future work. However, as the UK’s smallest businesses, freelancers are often ill-equipped to deal with the cashflow problems which can be caused by failure to pay on time.

One of the most significant issues to which PCG draws attention is the matter of “intra-company transfer” work permits, which Ms Stewart claims actively damage the UK IT skills market and put British freelancers at a disadvantage.

“It is of critical importance that such abuses are stopped, as they harm the IT skills base of the UK and displace hard-working UK freelancers,” she writes, urging Mr Osborne to open a consultation on the tax affairs of the offshore outsourcing companies using the bulk of such permits.

“The tax position of ICT workers is vague and open to abuse, putting such workers at an unfair advantage over UK freelancers.”

Nevertheless, the primary concern of Ms Stewart’s letter also affects thousands of limited company contractors - employment status. While PCG says that it is still committed to improving the legislation through the medium of the IR35 Forum, the organisation maintains that confusion will continue until Whitehall has clarified the definition of an “office holder”, which it says can make businesses uncertain when it comes to working with freelancers and contractors.

In the public sector, different government departments are taking disparate approaches to procedures brought in last year to deal with apparent tax abuses.

“We are seriously concerned that freelancers in the public sector are being subjected to huge uncertainty and inaccurate advice concerning their tax status,” Ms Stewart says, adding that she hopes the Autumn Statement will include better guidance for all public sector employers.

By Victoria McDonnell

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