Read the newspaper and one could be forgiven for thinking doom and economic gloom loom at every corner. Brexit and IR35 reforms in the public sector especially are giving people a sense of general unease. However with economic outlook improving, increased government engagement and changes to taxation, for contractors at least, things in 2017 aren’t looking too bad at all.
Speedy decided to outline seven reasons contractors can be cheerful in 2017
1. More people are choosing flexible working
December’s labour market figures from the Office for National Statistics (ONS) show that self-employment actually grew by 129,000 to 4.75m in the three months to November, representing a continued period of strong long-term growth.
Indeed, these numbers are a testament to the reliance of the contracting sector. With so much being thrown at it lately you would expect a decline in numbers but things seem to be going from strength to strength with many business recognising and relying on the indispensable work carried out by contractors.
2. Finding contract work is simpler than ever before
The emergence of new work platforms have transformed the sourcing of contractor work making finding jobs quicker and easier than ever before. Technology, in particular online platforms are allowing freelancers to accept jobs in seconds and fully embrace becoming their own boss.
3. Contractors are happier than employees
The contracting sector is not only growing but the vast majority are better off. A study published in October 2016 found that 97% of contractors are much happier than their permanently employed counterparts, reporting superior satisfaction levels in various aspects of work, including level of income, ability to express creativity, and opportunities for development. With flexibility and comparatively much higher day rates (when compared to permanent employees) it is no wonder contractors are such a jolly lot.
4. The economy is showing signs of improvement
Whilst the current economic situation is by no means stable the pound is regaining some of the ground it lost on the Euro and the Dollar post-Brexit vote. GDP also continues to grow and is expected to remain in positive territory through 2017.
More good news also comes in the form of accelerated contractor demand reaching a five month high in November 2016.
5. The public sector IR35 reforms aren’t all doom and gloom
The reforms to IR35 in the public sector mean that there are now incentives by all parties in the contractual chain to ensure contractors stay outside IR35.
As recently reported by Speedy that most contractors would sooner walk than accept an inside-IR35 public sector contract, clients and agencies will be keen to negotiate compliance.
In the past agencies and clients haven’t been particularly cooperative when it comes to negotiation IR35, however recent developments mean a conversation between the parties is much more likely, hopefully giving the contractor more room in what they want to agree.
6. Corporation Tax is set to shrink
Corporation Tax, currently at 20% will shrink to 19% as of April, before eventually falling to 17% by 2020.
How will this affect contractors? Well if you’re a limited company contractor this will give a greater incentive to keep money inside your company. Also there’s the added benefit of offsetting the increases in dividend taxation.
7. The Government is taking notice of the contract sector
Currently there are seven reviews, including two parliamentary committees looking at changing the world of work.
Most important among these will doubtless be the Government commissioned review of employment practices. There are hopes in the industry that findings will be used to clarify employment status for the benefit of contractors. There is a feeling the Government has recognised the world of work has changed significantly and review is drastically needed. Such actions are welcomed and along with the other positive signs detailed above it is hoped the government will continue to steer things in the right direction making 2017 a great year for all in the contracting sector.