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Budget 2016 – Little respite for contracting industry, says specialist

The Budget announcement gave little respite to an already regulation-beleaguered industry, according to contracting specialist Nova, but clearer rules would enable responsible intermediaries to demonstrate compliance and benefit.

"The contracting sector has faced more than its fair share of new regulations, changes and consultations on yet further proposed changes in the past couple of years," said Nova Director Marcus Green.

"And the Chancellor gave very little in the way of tangible support for the estimated 1.2 million people who are out on temporary, contract or interim assignments via a recruiter every day and who make a vital contribution to the UK economy.

"News that Class 2 NICs are to be abolished altogether in 2018 will be welcomed by many contract workers, as will the increase in the tax-free personal allowance.

"The continued freeze on fuel duty will also help support the haulage and logistics sector, as it seeks to take on ever increasing numbers of temporary drivers and support staff to meet the ever growing demand for online shopping and services.

“But from April 2017, the new responsibility on public sector organisations, to determine the employment status of contractors operating through PSCs and deduct income tax and employee NI, puts further pressure on a hard-pressed sector where demand for temporary workforce continues to grow.

“We have always ensured contractual compliance across all sectors and will work with our recruitment agency clients to adapt to the new rules, keeping a close eye on any further announcements and developments on IR35. For responsible intermediaries, clearer rules present an opportunity to demonstrate continued compliance and benefits for the PSC business model, for both contractors and agencies.”