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A recent poll asked IT contractors whether they favour a ‘hard’ or ‘soft’ Brexit. A soft Brexit was defined as continued single market membership and a degree of freedom of movement (e.g. the Swiss model), whereas a hard Brexit was defined as leaving the single market and the jurisdiction of all other EU institutions, such as the European Court of Justice.
The IT contractors polled are self-employed and typically earn upwards of £500 per day. A significant number either work or have worked in EU countries.
Derek Kelly, Chief Executive of ClearSky Accounting, who conducted the research said: “There is clearly significant concern among many IT contractors about the possible dislocation of leaving the single market and the impact that could have on demand for IT skills.
“IT contractors are often the first to feel the pain in the event of a downturn as it is normally discretionary IT spend that is cut. These tend to be the projects that use a high proportion of IT contractors. The fear is that the so-called cliff edge of a hard Brexit could undermine business investment, which would hit discretionary IT spend.
“IT contractors are highly mobile and many have worked in the EU. It is possible that, in the event of a soft Brexit, British IT contractors would retain the opportunity to work in Europe much as they do now. On the other hand, a hard Brexit would presumably limit opportunities for EU nationals to work in the UK, which could create more opportunities for British contractors at home.”
Public sector
The research also reveals that less than a quarter of IT contractors feel confident that the current government will be supportive.
ClearSky Accounting says that the new rules applicable to contractors working in the public sector, and the reduction in the tax-free allowance for directors of limited companies, will lead to tax rises for some IT contractors.
Derek Kelly said: “There is a growing sense that contractors are a soft target for tax raids. There is a perception that they have an unfair tax advantage but they do not receive workplace pensions, paid holidays or sick pay. They also face the risk of spending some time out of work between contracts.”
General election
According to the research, just under half of IT contractors want another general election this year (43.2 per cent). With just under 30 per cent thinking there should not be another election until 2022, and a similar number wanting election immediately after Brexit is formalised.
Derek Kelly said: “With the parties favouring a soft Brexit having gained ground during the election, it is likely that a large proportion of the IT contractors preferring a soft Brexit see a second election this year as an opportunity to decisively kill off a hard Brexit.
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Susie Hughes © Shout99 2017
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