April 27th, 2017
Prime Minister Theresa May’s decision to hold a snap General Election on June 8 caught even the political pundits by surprise.
Some are calling it a cynical move to take the country to the polls at a time when the Labour party is in disarray, so a Conservative landslide is almost guaranteed. Others are hailing it as the means to achieve a mandate to deliver Brexit.
Mrs May herself said only an election would ensure both that her opponents cannot derail Brexit and that Britain’s position is strong in talks with the European Union.
But whatever your political leanings, and whatever your thoughts on the Prime Minister’s motives, we are on course for another election.
Currently, the Conservatives are ahead in the polls, and if we are to trust the polls (which is an issue in itself) then we need to ask what the consequences will be for contractors, the self-employed, freelancers and independent professionals if we have another Tory government. And – again, if the polls are to be believed – a Tory government with a large majority.
Election and Brexit – uncertain times for contractors?
The decision to call an election less than a year after the Brexit referendum undoubtedly adds to the uncertainty already being experienced by contractors and self-employed people.
Several banks are rumoured to be leaving the UK post-EU exit. The European Central Bank, the euro zone’s banking supervisor, is thought to have received inquiries from British-based banks wanting to come under its watch; indeed it is believed the ECB it looking at ways it can fast-track their relocation.
Added to this are concerns public sector contractors and freelancers have about HMRC’s enforcement of IR35 – the tax legislation designed to combat tax avoidance by ‘disguised workers’ supplying their services to clients via an intermediary.
HMRC is shifting the emphasis on IR35 enforcement to public sector employers. The result will be bigger tax bills for contractors who are ‘off payroll’ if it is deemed that they are not genuine freelancers. According to a recent report in the Financial Times, HMRC hopes to rake in £265m by April 2018 through this push.
So we have Brexit, an IR35 crackdown and now an election … as Brenda from Bristol said, when she heard the election had been called: “You’re joking! There’s too much politics going on at the moment.”
What’s good news for contractors and freelancers?
Well, there is a lot of good news out there for contractors.
Cast your mind back to the Budget in March, soon after which Chancellor Philp Hammond back-tracked on his plans to increase National Insurance Contributions (NICs), because it was seen as an attack on the self-employed.
In the aftermath of the election, we hope this move will remain on the back burner, if not be dropped altogether. Similarly, we hope a new government will put off further enforcing IR35, so mitigating the impact it may have on contractors.
Indeed, the immediate aftermath of an election tends to be a period of consolidation, so we would hope that no drastic legislation affecting contractors, freelancers and the self-employed will be forthcoming for some time.
And finally, look at property prices. These have remained resilient as has the mortgage market in spite of uncertainty, which is good news for the contractor property market and contractor mortgage market.
Property expert Sarah Beeny, writing on her website Tepilo, says she believes the election will be good for the housing market, as whoever wins will start with a clean slate and a strong government.
Property prices really do indicate the temperature of the economy. As these remain buoyant, we can infer that consumers and contractors are confident about the outlook for the UK.
Media Contact: Sarah Middleton, Public Relations Manager
Tel: 01489 555 080
Email: media@contractormortgagesuk.com