In a survey conducted a day before Chancellor Philip Hammond presented the Budget, nine out of ten contractors stated that public sector projects would be adversely affected if contractors, including IT contractors, stage a walkout over off-payroll rules that will be enforced from 6th April.
Public sector contractors stated that should there be a walkout, central government would be affected the most, followed by the NHS, the Ministry of Defence and other projects such as HS2.
The survey was conducted by Qdos on the eve of the Budget, and around 2,000 contractors were polled. Qdos Chief Executive Seb Maley said that every public sector project would be affected in the worst possible manner if the contractors decide to stage a walkout.
Nearly 95 per cent of surveyed contractors said that major projects funded by taxpayers will suffer if they and other contractors decide to stop working before 6th April. Already, two departments of the Ministry of Defence – UK Home Office and Defence Equipment & Support – have been affected by contractors leaving projects. Even teaching hospital Guy’s and St Thomas’ and Transport of London have had to contend with contractors leaving projects midway.
Many contractors believe that the Budget 2017 was not favourable to them, considering the fact that UK PSCs are making a significant contribution to the UK economy. With the government bringing in the off-payroll rules, a large chunk of PSCs have made it clear that they would be leaving the public sector before the rules are brought into effect on 6th April.
Maley contends that the relationship between the government and contractors is already quite bad and the Budget 2017 did little to improve this relationship. The changes to the off-payroll rules are going to be put into effect in a few weeks’ time, but it is just recently that HMRC released the digital tool to determine a contractor’s IR35 status. However, many are still questioning the effectiveness and accuracy of the tool, and therefore contractors are in a quandary, explained Maley.