IT contractors: undervalued and under attack

A recent survey by The Pulse Umbrella Group revealed that only 17 per cent of IT contractors felt that the government was on their side.

That is hardly surprising because rather than encouraging this important sector, the government is making life more difficult, writes Dave Chaplin, CEO and founder of Contractor Calculator, which provides online advice and guidance for contractors, freelancers and the self-employed.

IT contractors are important and the government must recognise their value for the UK’s good. IT contractors play a vital role, using their skills to ensure continual innovation in Britain’s businesses. As contractors they offer flexibility and can therefore apply their expertise when and where it is needed. They work for multiple clients and the results are tangible.

The resourcing company, Experis, has published a report that shows that contractors make up 24 per cent of the IT sector’s workforce and this figure is expected to rise to 28 per cent by 2020. London has overtaken New York as a centre for IT expertise and there are billions of pounds at stake if this growth is not encouraged.

In Ernst and Young’s Attractiveness Survey, 23 per cent of investors from over 440 international companies named London as their top city for IT - second only to San Francisco’s Silicon Valley, which was chosen by 29 per cent of investors. In the financial sector, the United Kingdom is considered number one in the world for IT and the government itself estimates that financial tech has attracted £524 million in investment, generating £6.6 billion revenue in 2015 alone.

In these times of uncertainty, instead of encouraging IT and maximising its potential to transform the nation’s industries and businesses, the government is only making things harder. Contractors are undervalued and under attack through taxation, loss of subsistence and travel allowances and the impact of IR35 reforms.

IT contractors who operate quite legitimately outside IR35 are coming across increasing numbers of employers who are so concerned about IR35 that they would rather forego the benefits of hiring experienced IT professionals than be caught up in the increasing amount of red tape being thrown at them.

The government considers contractors to be evidence of poor workforce planning and seem oblivious to the economic consequences of putting the squeeze on contractors who work in either the public or private sectors. The policy of austerity is driving away skills and experience from the workforce, suffocating innovation and development and is likely to see this country fall behind in the technology stakes when it should continue to take the lead.

I would urge the government to give IT contractors support rather than penalising them. If they do the UK economy will thrive even more.

Dave Chaplin is the founder and CEO of Contractor Calculator an online resource for contractors, freelancers and the self-employed that has become the expert guide to contracting since it was launched in 2004.

June 2019
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