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PPJWT Bonus Lecture – Future of Contracting

07 December 2020 Comments off

2 minutes

379

I was umming and ahhing over this lecture for a while, since the subject is relevant to me now. I am an independent contractor and for 2020, I have had to suffer the consequence of not finding client who will afford OUTSIDE IR35 determination.

It led me to really think deeply about the future of UK contracting. In short, the Off Payroll Worker rules are coming into force the UK on 5th April 2021. As I was recording the PPJWT (Personal Performance in Java work Technology) segment on Job Security, I thought I need to mention contracting as a worker opportunitys with risks and rewards.

I took the decision to make this particular lecture free-to-view, because perhaps if only a few on my listeners and course participants are contracting or are thinking of becoming a contractor.

In short, the current situation for UK contracting looks dire, because of the following:

  • Blanket assessment of contractor status: every contractor is INSIDE of scope of IR35 and therefore on a payroll, which means
  • PAYE (Pay As You Earn) taxed at source like an employee
  • No chance at all to claim business expenses
  • No chance at all to claim travel expenses (forget it, if you want to travel and commute from Glasgow to London (Sunday night, Monday morning and back again Thursday night, work-from-home on Friday))
  • No chance at all to claim equipement expenses (laptop, phone, tablet, printer)
  • No chance at all to claim training expenses including conferences and membership of professional associations (like ACCU, BCS, Agile SCRUM UK, QCon, Devoxx)
  • No sick pay (well contractors don’t want that in any case)
  • You are autoenrolled into the national pension scheme
  • You are deducted national insurance and apprentice levy tax (PAYE)

In short, you are a contractor without the legal employee rights at all, including dismissal. A client now has to determine whether they want you as contractor for contract of service as opposed to contract for service. The form is not a business-to-business relationship.

With all of the above, one has to wonder what is the point of being a UK contractor in 2021 and beyond?

Discuss.

Reference:

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Due to the Off-Payroll Working plan for the UK government, I am enforcing stricter measures on contracts. All potential public sector GOV.UK contracts engagements must be approved by QDOS and/or SJD Accounting. Please enquire for further information.