By Damian Broughton MBE
Some would say that 2016 was one of the most noteworthy years for change, but as we’re now firmly into the new year, it looks as though 2017 could become even more notorious than its predecessor. I would like to say from the outset that we must remember that change always brings with it opportunities. And that it is up to us to grasp those opportunities.
So, what do we already know?
Well, two changes that will affect our sector dramatically this year are:
- The introduction of the Apprenticeship Levy
The apprenticeship levy will affect every company in the UK that has a gross payroll cost of over £3 million.
- The legislation affecting contractors in the Public Sector
Contractors in the public sector, who work through their own Personal Service Company (PSC) will be assessed by the public sector body regarding their IR35 status using an online tool that is being developed by HMRC. At present, 10% of contractors in the public sector are declaring themselves caught by IR35. HMRC think this should be 90%.
Looking ahead, the Government and other bodies have recognised the growth of the flexible workforce, and 2017 will see six reviews into this flexible, temporary, ‘gig-working’ world. They are:
- The ‘Taylor Review’ on modern employment practices. This was launched on 30th November 2016 and will run for 6 months.
- The Labour Party’s ‘Workplace 2020 Review.’
- The Labour Party’s separate ‘Future of Work Commission.’
- ‘The Future World of Work and Rights of Workers Inquiry’ by the Business, Energy and Industrial Strategy Select Committee.
- The Resolution Foundation’s ‘Temporary Fix or Lasting Problem?’ review of agency work.
- The latest review to be announced was the Work and Pensions Select Committee inquiry into ‘Self-employment and the Gig Economy’, unveiled on 1st December 2016.
On top of this, the Office of Tax Simplification (OTS) announced it was creating a paper on the tax implications of the ‘gig economy’. It is the Government’s stated intention to have an agreed and clear way of working that can be adopted by these workers by April 2018. We will be watching and engaging in all these reviews, and keeping a sharp look for any potential changes.
Brexit so far has had a negative effect on the economy, with companies being unwilling to commit to projects until they have some steer from the Prime Minister on negotiations.
However, the ONS has brought good news in showing continued growth of the flexible workforce. Statistics show that between September and November last year there was an estimated increase of 133,000 to 4.77 million self-employed people in the UK (15.0% of all people in work).
And there are several major projects that our contractor clients are hoping to work on, like the Hinckley Power station, Manchester Airport, the building of nuclear submarines, HS2 and the Leeds to Liverpool line; when these projects start, we will naturally see a growth in our industry.
This year will be the last to have 2 budgets. After the Autumn Budget of 2017, the next one will be Autumn 2018. This is a positive move by the Government, as any changes will not be implemented until April of the following year, which will allow for timely planning and impact assessment.
Another year of legislative change with potential challenges, but as a modern company with a proactive approach to change, Danbro are always looking ahead.