Now the dust has settled on the OTS report, it’s been fascinating to see the various reactions to it. Most interestingly, nobody seems to have focused on the biggest potential recommendation, that IR35 be suspended with immediate effect. Which is a shame, really.

Most of the discussion obviously centres on the main recommendation, that PAYE and NICs get merged into a single tax. As I said last week, this is a far from trivial exercise, although the ultimate benefits in terms of simplicity and consistency would be enormous. Even if Mr Osborne does take this on, as many commentators seem to think he will, it will be years before it is achieved. More importantly, if the focus stays on the anomalies that are bound to arise during the transition, such as pensioners who don’t pay NICs in the first place, rather than on the real benefits then it will go nowhere. So let’s hope that just for once the commentators and pressure groups keep their eye on the real prize and, just for once, look at the long term picture.

So assuming Osborne does bite the bullet and make a bid for being a seriously reforming Chancellor (as opposed to one who simply wants to cut everything, which is how the opposition want to portray him and which really is a load of Balls), then what is the next OTS recommendation?

That’s right – stop IR35. Whoo hoo…

Needless to say, even doing that is not that simple. What happens to the cases currently being investigated? Are they simply stopped, leaving the worker hanging without a decision in case it is later reinstated, as may happen? Are they abandoned altogether, which seems a little unlikely? Or will they be allowed to continue to a conclusion, which is my guess since legal processes are fairly much unstoppable once invoked. About the only certainty is that nobody else would have a simple PAYE audit mutate into a five year, £50,000 court case.

Take out IR35 and would we then see a rush of incorporations as all those who say they use umbrellas because they can’t be bothered with the administrative overhead of their own company suddenly realise it isn’t actually that much of a problem and the extra income would really come in handy. That wouldn’t do the umbrella companies a lot of good either, especially with the Agency Workers Directive kicking off later this year.

In fact the only people to remain comparatively unaffected by it all are those like me who have their own companies, understand the rules who are trying to work as a business and always have done.

The “In Business” tests didn’t get a lot of attention, possibly because the OTS doesn’t really see adding an extra layer of administration as a simplification, even if it would greatly limit the number of cases HMRC would have to worry about.

And the third option, that HMRC’s administration of IR35 be greatly improved, was described by PCG as “risible”. Not because the idea of HMRC doing anything even vaguely resembling effective administration is seen as something of a forlorn hope (which it is, of course), but until HMRC are subject to a formal duty of care and subject to a full cost benefit analysis of the cases they bring, there is nothing to stop them pressing cases that they have little or no hope of winning, just because they can. They demand we do everything 100% correctly and attack us for the merest slip, but are totally exempt from any such constraint themselves.

We have to wait until the Budget to see what is going to happen of course, but PCG are to be congratulated for driving us to the position we now find ourselves in, that not only HMG are recognising that IR35 is an abomination in the eyes of the Lord, but that they may actually do something about it.

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Image: Squid Kung Fu by oskay

Big news of the day is the release of the Office for Tax Simplification’s report on Small Business Taxation. Well, big news for freelance contractors anyway. This is because this is the report that lays out what they think should happen to IR35. And it’s received a resoundingly cautious welcome from people like the PCG.

So not all good news then?

The main recommendation is that HMG bites the bullet and merges PAYE and NICs into a single tax. This is something that’s been around for a while – the Mirrlees report said exactly the same thing last year, as did a Treasury consultation from 2007. Except we didn’t really have a functional government back then and it went in the “Too difficult” box.

However merging the two has a lot of useful side effects, such as eliminating the advantage of payment through dividends, which among other things would make IR35 completely unnecessary. Which has to be a good thing in anybody’s book.

The snag is this will take years to bring into effect and the more you look at what’s involved the more complicated it gets. For example, the tax system recognises the difference between earned income and risk-based investment income and taxes them separately so as to encourage entrepreneurialism. Pensioners don’t pay NICs, so would need their own separate tax treatment. And so on – getting from here to there is a complicated and politically dangerous road.

But the report goes on to say that if that basic principle is adopted, then IR35 should be suspended with immediate effect. This suspension would allow HMRC to focus on other, frankly rather more important areas of tax gathering – you know, the ones that actually return more than they cost to collect – as well as showing what would happen to tax revenues if IR35 was simply abolished outright. So, for example, all those people who work through umbrella companies out of fear of IR35 may well incorporate and get the benefits of being a real contractor. There may be a rush of companies pushing their employees into turning freelance, which is what IR35 was supposed to prevent (it didn’t, as it happens, but let’s not go into that right now). There’s also a whole industry built on the existence of IR35 that would go into a sharp decline. So lot’s of potential issues to be resolved.

To be fair the report also suggests two other options; firstly that IR35 remains and HMRC are far more sensible, responsible and systematic in the pursuit of its enforcement (which caused me some hilarity and probably wins this weeks Littlejohn prize for “You couldn’t make it up”) or secondly the adoption of a series of tests that put you outside the scope of the IR35 legislation, clearly and simply.

So why a “cautious welcome” from the PG, who have been pushing for the abolition of IR35 for a long time? They are totally in favour of the suspension of IR35 as a step towards its removal but suspensions can be reversed, so it’s not the 100% solution they were hoping for. They also support the idea of the “in business” tests (as does the IoD, come to that), but are not exactly in favour of the “HMRC taking more care option” – to quote them, “This is widely regarded as risible”. And of course, it is all dependent on Mr Osborne taking note of and accepting the main recommendation for merger.

Still, it is a huge step forward and PCG deserve all credit for their work in getting us to this point. The war is not yet won, but we have perhaps now won the El Alamein battle for the abolition of IR35.

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And, I have to say, quite a successful one, perhaps unexpectedly given where we started from. Speaking strictly as a freelance contractor of course, I thought it appropriate to round off 2010 with my slightly biased view of how the year has gone. So here goes with a very personal summary of the key events.

The main one, of course, has to be the replacement of Gordon the Glum with a real person. You may not like CallMeDave but you have to agree he’s an improvement on his predecessor: OK, not if you’re Ed Balls or Piers Morgan of course, but who listens to them anyway…?

We’ve gone from a Government that was totally and utterly convinced they knew best how to spend your money to one who was perfectly happy to let you spend it how you wanted. Of course, there wasn’t all that much to spend and they were going to have to hang on to even more of it than before. But let’s not be picky; at least we know why they’re being so mean.

So let’s look at the good things…

ICTs and the abuse thereof. Something I may have mentioned once or twice before? Leaving aside the wider question of uncontrolled immigration, there is a clear intent by HMG to cut down the number of workers coming in to the country to undercut the local workforce. Of course we are never going to stop companies using the cheapest labour they can find, that’s all part of capitalism and globalisation, but at least someone is trying to make it a bit harder to get us to train them how to do take our jobs away and kill off the industry at its source. Which, ultimately, has to be a good thing?

We still labour (geddit, geddit…?) under the Damoclean threat of IR35 of course. I never shared the conviction of some that a Tory government – oops, sorry, a Coalition led by the Tories – would instantly delete IR35 from the statute book. That was never going to happen; there is a political justification for IR35 that, while utterly barking, is not going to be reversed in any meaningful way.

Obviously the establishment of the OTS, and its very clear directive to look at IR35 as a priority was highly welcome. Even more welcome was the PCG gaining an influential seat on the Consultative Committee of the OTS looking at small business taxation. An organisation with 20,000 members and a 10 year lifespan gaining such access and respect at that level is something that simply cannot be underestimated. The OTS is working to some impossible deadlines, but fingers crossed, progress is being made.

The job market certainly seems to be picking up. I’m seeing hugely more jobs in my scope that I saw this time last year. Of course, 95% of them I won’t bother going for because the hirers are demanding impossibly tight lists of skills, industry knowledge and qualifications. The agencies are still incapable of challenging them and offering alternatives. For example I’ve been tracking a discussion on LinkedIn about how to use shared services and/or outsourcing to save money in Local Government. Good idea and one that may well work. Sadly, the consensus is that it won’t happen because the hirers put Local Government knowledge well ahead of any business experience that means you might actually understand how to do it properly. You see the same thing in Finance, which is a real shame since that’s where the work is. And don’t get me started on Security Clearance.

Oh, and I nearly forgot. St Vince of Cable has shown himself to be every bit as incisive, astute and intellectually superior as I always thought he was…

Personally it’s not been a bad year. I’ve worked most of it and actually banked a profit, which is nice. There is certainly reason to be optimistic about next year. The PCG continue to make great strides forward which is a source of pride, even from my marginal input to that progress. And I’ve had some nice comments about this blog, which proves that at least people are reading it, even if they don’t agree with me.

So roll on 2011. I think it could be an interesting year. I’ll see you there…

Alan Watts can found at LinkedIn.
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Image: 20101022-IMG_9603 by Dhammika Heenpella

You may recall I wrote last week about there being an apparent majority of recruitment consultants who don’t actually know what they’re doing, much less understand what (or rather who) it is they’re selling, Sadly that also seems to be true of contractors themselves.

Now obviously I don’t mean the things they know about their chosen field; if you aren’t pretty damned good at what you do you won’t last long as a freelance after all. Clients hire freelances to add instant value and high levels of expertise at the drop of a hat (or a well-written contract, anyway) and I’ve met very few indeed who don’t deliver exactly that.

No, I’m talking about the other side of the freelance business, running the business itself.

Perhaps I’m biased since I’ve been doing this for quite a while now, but I am continually surprised at the kinds of questions you keep being asked. It’s not like the information isn’t out there. If you can’t face trawling through the HMRC labyrinth to find things – which is something I try to avoid as much as possible – there are many very good and authoritative guides on the web, not least the PCG’s Guide to Freelancing. So why don’t people read them?

For example, in the last week I’ve seen examples of all five of the obligatory dumb questions…

The “My accountant can’t count” question. Someone who has painstakingly worked out his taxes and thinks he should be getting more than his accountant says he should. Usually they’ve either forgotten something trivial, like Employer NICs, or they’ve got the basic arithmetic wrong. That’s why you use accountants, so why try and double guess them?

The “Why is my accountant so expensive” question. These are the guys who begrudge paying a tiny percentage of their gross for a professional service. Try as you might, you will never persuade them that if an accountant actually costs you money, get a new one. He’s there to make sure you get the best return on your gross after all. Unless you tell him to do something totally silly of course.

The “How can I get to keep 95% of my gross” question. Limited to those who have either fallen for the sales blurb or don’t actually think living and working in the UK means you have to pay UK taxes (aka “Doing a Green”…)

The “A contract is just a piece of paper” question. The guy who’s signed up to a contract but then discovers he hasn’t got a notice period (which is a good thing, by the way, not that they’ll believe you about that) or has to carry PI insurance or something else he doesn’t like. Followed by plaintive cries of “What if I simply don’t bother, will the agency put a hit man on to me”. If it’s in the contract and you signed it, it’s legally binding; why is that so hard to understand? Try reading and negotiating before you sign it next time

And finally the “What expenses can I claim” question. Comes in many forms this one. Why can’t I claim travel after 24 months (you can, it’s just that it’s taxable). Can I have a 52” plasma screen monitor for my laptop (sadly it’s too big for the study, I’ll just have to keep it in the living room). And so on..

And why does this suddenly matter? Blame IR35, as usual.

If, as seems increasingly likely, whatever replaces it is based on proving you’re in business – just like Dim Prawn always said was the case (and then promptly forgot about saying it) – then understanding the rules of business would seem to be a pretty good starter for ten.

Which means, sadly, having to ask questions…

Alan Watts can found at LinkedIn.
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Image: The Questioning Roboto by matt.hutchinson

Traditionally this is the Silly Season, when the Press have to file stories about singing sheep to fill the papers since there is no real news to talk about. But actually there are not one but two interesting stories to ponder this week, one illustrating how very confused the whole immigration argument has become and the other illustrating just how out of touch with reality the Senior Civil Service seems to be.

Firstly, immigration. A large delegation of politicos, business leaders and sports stars (why sports stars?) led by Mr Cameron has been dispatched to boost our trade with India. Given that they are a tiger economy in their own right, this is probably a good move. Snag is, the Indians and Vince Cable have been talking about opening up the barriers to immigration while everyone else is talking about closing them. Remind me, what is the definition of “Coalition”?

Still, Mr Cable is actually correct; bless him; the ability to allow highly skilled workers in to the country to fill necessary gaps in our native skills is a good thing, not least because we have signed reciprocal treaties that mean we have to do so. Sadly this has got wrapped up with the whole net immigration argument which in turn has evolved from the last government’s unofficial but very real open door policy. We do actually need these skilled people, be they heart surgeons or chefs who understand Thai cuisine. Provided they pay their way and add some value to the UK economy, what’s the problem?

However, before we get all optimistic about them, how about the government looks at abuses of the system first? There isn’t a skills shortage in IT; we have 40,000 IT graduates out of work and hundreds of good applicants for almost every role. Why then, do we allow IT staff to come in on Intra-Company Transfers in their thousands to learn how to do our jobs so they can export them back home?

This is an entirely different issue to the one about net immigration. It would be nice if HMG and the Press could get that difference clear so we can have a reasoned argument about it…
The other interesting story is that the current IT Director for HMRC, a certain Mr Singh, is finishing his three year fixed term contract but staying in post as a freelance through his own shiny new limited company. Instant cries of “Foul” and “Why isn’t he being done under IR35?” arose. Unfairly perhaps, since he hasn’t yet had to fill in a tax form so his position under IR35 is unknown. OK, he’s a classic IR35-caught candidate, and I can’t believe HMRC would let him get away with anything, but he hasn’t done anything wrong yet.

Or has he?

The point of a Fixed Term Contract is that it has a definitive, pre-agreed end date: the clue is in the name. So why, after three years, is there not a suitable replacement lined up ready to go, either from the open market or by promotion from within? Is there really only one person suitable in the whole of the UK? Surely not…

But there’s even more to this debacle…

They are paying Mr Singh as a freelance a day rate equal to around four times his previous salary. HMRC mandarins claim this is to achieve parity with an equivalent Deloitte consultant. Fine, except Mr Singh doesn’t work for Deloitte and so doesn’t have to support myriad partners and office buildings. Nor a sales and marketing team, apparently. So while it‘s good that HMRC accept that freelance workers have greater overheads than employees, something we’ve been arguing about for at least ten years, a little bit of market perspective wouldn’t go amiss. Especially when it’s our money they’re spending.

You could also argue that Mr Singh, having failed to identify a suitable replacement, has significantly failed one of his key duties. After all, had he gone under a bus, clearly there is nobody in the organisation, or outside it, ready to take over. So much for continuity planning then.

We could also query the proper application of the OGC tendering rules for new staff and various other inconsistencies, but let’s not Labour the point more than necessary.
In May I was hopeful that our shiny new Coalition had a clear idea of where they were going and why. I confess I am beginning to have my doubts.

Alan Watts can found found at LinkedIn.
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Image: Their serious sides by tim_d

There’s been mixed reactions to the Coalition’s plans for the promised IR35 review. Mostly people see the announcement in the Budget as a positive step forward, and even those who previously seemed to have found a new enthusiasm for IR35 seem to have gone quiet.

And you have to admit that Mark Prisk’s reported comments, indicating that IR35 as it stands is doomed, was welcome news, if they were accurately reported.

Of course there are still those who demand immediate action and the instant repeal of IR35 and all its manifest evils, but I fear they are to be disappointed. Let’s face it, we are talking about Government decision making here. Despite the obvious urgency and energy of our new masters, they work at a speed that makes geological time seem positively reckless.

The other thing that keeps coming up everywhere is “What do we replace it with?” I know I wrote about son of IR35 recently, but this constant drip feed of suggestions for how it can be re-worked is beginning to irritate.

For one thing, nobody has yet persuaded me that it needs to be replaced. In my case, I own a Limited Company through which I provide various services to a range of clients (including this blog, for example). The company has been around for many years, is operated in accordance with all the relevant laws and pays all its required taxes without a murmur (well, not a very loud one, anyway…).

So why is there a clamour to single me out as some kind of anomaly and insist that I have to operate under some differential taxation regime because I don’t aim to become a rival to Accenture? Actually I am a rival to Accenture in many ways, but let’s not go there just yet!

With or without IR35, I would still use my company to sell my services, that’s what it does. So what am I doing wrong that some people demand I become some form of special case?

My hope is that HMG and the Office of Tax Simplification will see sense and cancel IR35 with no thought of replacing it. I admit they may take a longer look at small company taxation in the round, but that should be against all small companies equally. Those who for various reasons only have one or two workers are no different to bigger small companies, if you see what I mean, so why should they need different treatment?

On a different subject, I was talking with my last clients recently, who are in the Public Sector, and asked them how they were planning to cope with the impending cuts in public expenditure. Seems they are actually quite relaxed about them, since they’ve been working a programme of examining expenditure and optimising their budget management for several years now. They are confident that they’ve already made the level of savings expected of them. So you have to ask, if that one organisation can do that so successfully, why can’t all of them…?

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Image: head scratching by a r b o

There’s no doubt about it, the wholesale contractor accountancy marketplace is big business and everyone wants a piece of the action.

In recent months, a new wave of online accountants have been hitting the forums and contractor portals hard in the hope of gaining a foothold in what is already a fragmented market. Their message is clear – why pay £130 a month for the ‘old school’ contractor accountants when you can get the same, if not better service for a third of the price?

It’s a pretty compelling argument and their proposition is almost too good to be true.

Lets dig a little deeper.

Was is an online accountant?

An online accountant offers contractors an ‘end-to-end’ accounting service. This usually combines a bespoke web-based accountancy package that is backed up by a team of accountants and personal account managers. The idea here is that the contractor or freelancer is able to create invoices, manage their expenses and calculate a real-time view of their business. This then enables them to work out how much they can pay themselves (in PAYE salary, expenses and dividends) without having to produce in-year accounts or time-consuming reconciliations.

Obviously there is an element of work required by the end-user but certainly no more than you are asked to do when working through a traditional contractor accountant, and in some cases much less. The technology is also impressive. Real-time feeds into HMRC, Companies House and the government Gateway make online accountants the perfect choice for any time-precious contractor.

Of course, the more challenging aspects of accounting are managed by the online accountants who will submit VAT, corporation tax and personal self assessment returns on behalf of their clients. They will also handle the Companies House annual return and accounts as well as advising on complex issues such as IR35, family business tax, ESC 16 and the agency workers directive.

How much does an online accountant cost?

Most online accountants pitch their monthly fees around the £50-£60 mark. This includes all of the above services as well as unlimited telephone support and free company setup.

Why are online accountants so cheap?

One word – volume. Most high street accountants are happy with 100-200 clients and are therefore keen to maximise their return on investment for what is a relatively small client base. By making their business scalable, online accountants on the other hand are able to service more and more contractors without taking an enormous hit to their margins. This is why their fees are way cheaper than some of the more well-known contractor accountants.

Where can I find out more?

We have a selection of online accountants in our top 10 directory although companies such as Crunch and My Accountant Friend are definitely worth a closer look. A quick search in Google will throw up at least another 20 providers at the time of writing so take the time to do your research. My guess is that this is just the start of a new and exciting time for the contractor accountancy marketplace……I shall watch with interest.

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Contractor accountants can pass on this welcome news for freelancers and sole traders from Mark Prisk, the small business minister. In a recent interview he said that the comprehensive review the coalition is going to undertake of business taxation will seek to replace IR35 with a long-term alternative.

The rules surrounding IR35 are continually changing and the new government wants to put in place a lasting settlement. The chairman of the PCG, Chris Bryce, is delighted by the news. Although there is still a lot of work to be done in order to find a fair settlement, he is optimistic that his organisation can work together with the government to achieve this.

George Osborne’s budget speech only contained one mention of IR35 when he confirmed that the tax would be reviewed, along with the small business tax, and that the government would release more details soon. It is expected that the review will be launched in the summer.

The coalition has committed to simplifying the British taxation system. They want to implement measures that prevent tax avoidance whilst at the same time ensuring that the self-employed do not face undue administrative burdens.

There are currently around 1.4 million freelancers in the UK who are governed by IR35.

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Image: a dilemma by Julia Manzerova

Now the excitement of the promise actually to consider IR35 for a serious reappraisal has died down a little, I’ve been giving some thought to what that might actually mean. What can we expect Son-of-IR35 to look like?

For one thing, I think there will still be something there that looks like IR35. Let us not forget that the original justification was to prevent the Friday-to-Monday syndrome, where a worker would switch from permanent employment to freelance contract doing exactly the same job. Either the worker did this to take advantage of the tax breaks available to a Ltd Co owner or, more often than people would admit, it was the employer divesting himself of assorted legal obligations, not to mention having to pay Employers NICs.

Of course IR35 stops this, by making the cost benefit of doing this unattractive. Snag is, it also gets in the way of the worker who genuinely wants to go freelance. So my suggestion is that IR35 (or whatever the new version is called) should only apply where the freelance’s client is the same as the immediately previous employer for a period of one year.

However, if we assume that some form of IR35 is still out there post review, the best we can hope for is that there are clear rules about when it applies. Most contractors are angrier about the lack of clarity and resultant uncertainty than about paying the taxes, after all. This is here the original “in business” test comes in – you know, the one that Red Dawn prattled on about while simultaneously refusing to accept that any freelance could possibly be in business on their own account.

But how do you demonstrate you’re in business? That’s the question…

One option is if you are VAT registered. There’s no way you can do that as an employee; even if you did, there would be precisely zero things you could legally claim the VAT back from anyway. You could add in the existence of Your Co to make the test a bit firmer, although that might impact the Schedule D Self-Employed workers. Although the Schedule D self-employed worker can’t really be hit by IR35 since there isn’t an intermediary company in the chain anyway.

Another option is to waive your rights to things like employee benefits, JSA, maternity or paternity leave and the rest of the panoply of employee benefits. The logic is that since you are not paying employee-level taxes, why should you expect to get employee-like benefits?

You could be a bit more imaginative and scrap S44-47 ITEPA 2003 (which replaced S134c) which is the one that makes the intermediary liable for unpaid taxes and is why agencies won’t deal with unincorporated (or non-umbrella) contractors in the first place. Which – whisper it quietly – is why we then got IR35…

Or, of course, you simply delete IR35 altogether – with the sole exception I mentioned above to stop the Friday-to-Monday trick. If there’s no law, there can be no uncertainty. Freelances can choose to work through an entirely legal UK Limited Company and operate it just like every other one. A bit like I do right now.

Or is that too simple…?

Anyway, end of contract today so I’m off for two weeks in the sun. Since I refuse point blank to take my laptop on to the beach – and she who must be obeyed would flay me alive if I tried – the next blog will probably be on June 25th. Let’s hope there’ll be something to write about!

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Image: Blue Devil Imp Decal by Duke Yearlook

You would have thought that following last week’s news about the possible replacement (or even repeal) of IR35 that there would be signs of general celebration. But nope, not a bit of it. Quite the opposite in fact.

On one side we have a people saying that it’s only promising a review at some point, so clearly this is just another HMG stitch-up. There’s another group saying it will simply metamorphose into a version of the Construction Industry Scheme, making you an employee unless you supply your own paper tape or something. There’s another group saying that actually IR35 isn’t such a bad thing, it has its uses and we shouldn’t be surprised to see it left unchanged.

I also read one comment that PCG weren’t actually representing freelance workers at all and their work was actively damaging the “real freelances” best interest. Sorry? Didn’t quite follow that argument myself.

Really fills you with joy, doesn’t it…

One thing I have noticed though is that a lot of this negative comment is from people whose business is largely built on the existence of IR35. Fair enough, they’re looking at the business disappearing, but that’s the nature of business, after all. Still, let’s hope they’re simple bemoaning the threat to their business and not trying to persuade HMG to keep IR35 alive so they can keep earning rather than servicing their customers.

So it looks to me like the real advice is perhaps not to believe all you read until you know what the author does for a living.

There’s another group who are predicting the instant demise of PCG if IR35 goes. What they haven’t realised is that IR35 is only a small part of the freelance landscape. OK, it’s a pretty serious one, but even so, some of the plans coming out of Brussels make IR35 look positively benign. There will be a serious role for PCG for a while to come yet.

Finally there’s muttering about the promised Office of Tax Simplification being rigged. Looking at the way these things used to work that’s not a bad conclusion, except it seems that this one will be staffed with genuinely non-political experts with a wide-ranging brief. Certainly the one potential member I know of cannot possibly be accused of being pro-HMRC in any way, shape or form. Or pro-IR35 come to that!

Still, it hasn’t even been formed yet, much less done anything. I think I’ll be keeping up my insurances and being careful to read the contract small print to keep me clear of IR35 for a little while yet. Although hopefully, not too long a while…

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Image: J. Jonah Jameson by OntologicalDoubt

When I wrote my piece last week, I was saying I was suffering a little from having to write it before the election result was known. I didn’t think that I would still be waiting when I started putting this week’s one together…

Anyway, it is all settled for now, and it looks like we really are in for some interesting times. Clearly the next budget will not be pleasant for anyone; certainly some of my contacts in the Public Sector are seriously worried about what the future is going to bring. Although if the markets react positively then things should start to move and there may be more work around for everyone

On the other hand, if they change the tax thresholds – something I actually think is a damned good idea – then a lot of contractors are going to have to rethink their payroll policies a bit. Also if the new government deliver their promised Office of Tax Simplification and put IR35 at the head of the list, then we will have something to celebrate.

Elsewhere there was a far more interesting story on the news this morning. A hospital in Nottingham has switched its food supplier to a consortium of local farms, saving themselves several millions a year but cutting out the retail supply layer and many thousands of food miles. The farmers are also delighted; as one said, until recently he was looking at closing down, now he’s making a profit.

Now that’s something the whole of government needs to take notice of. A few years back I proposed the creation of virtual consultancies, who pick up parcels of work that are normally handed out to the big consultancies (who are usually using contractors to do the real work anyway…). The Nottingham hospital is precisely that – ok, using food instead of code, but you know what I mean – then we are truly in a brave new world.

By the way, what do we call the new government? The BBC is sticking with “the Liberaldemocratconservativecoalition”, which is less than snappy. “ConDem” doesn’t sound quite right either.

But one anagram of Lib Dem Tory is “Bye, Mild Rot”, which sounds fairly appropriate…

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Image: Summer Baby by zetson

Now here’s a problem. I try to write about things that have happened during the week that might affect us freelancers. Usually I manage to find something worthy of comment, but this week it’s going to be a bit tricky.

It’s because the Election is on a Thursday that I have a slight problem. I normally write these words of wisdom on a Thursday, you see, which means that as I sit here with voting still going on, it’s a bit tricky to find something to talk about that will still be relevant on Friday morning.

There’s not been a lot of news either, if you discount Nigel Farage’s plane crash or the Labour candidate in Bootle losing the end of a finger when bitten by a dog (which all goes to prove everyone’s a critic). There have been some interesting surveys around. One of these shows that over 50% of contractors would vote Conservative. So perhaps there are a lot of people that agree with my views on why I hate this Government.

So I’ll wait a little longer until the exit polls are published and see what they think will happen. In 2005 they were spot on in predicting the result. Then again, the previous four were miles away from the reality. I’ll return to that point a little later

Meanwhile I’ve started hunting the next contract. Tricky operation, with limited internet access at work (I use my own mobile internet link, but we’re in a bit of a black hole where I work) and obviously I can’t keep calling agencies up from there either. Not that agents ever seem to answer the phone these days, it’s a constant litany of “He’s away from his desk” and answer phones. Actually they are well named, answer phones, since that’s all they do. If only someone would invent a Call-you-back-right-away phone, we might get somewhere.

So, the initial exit poll is in. Have to say it’s a bit inconclusive; a swing away from Labour (or, more likely, away from Gordon) but showing the Lib Dems’ share going down, which seems a bit unlikely. And all of a sudden they’re talking about voting reform rather than economic recovery. Good to know the politicians understand what’s really important…

Anyway, no real decisive conclusion. So let’s wait until a few real counts are declared and see what that tells us…

Hmmmm… interesting. Two declared, both safe Labour seats. Both big swings to the Tories. Perhaps IR35 is doomed after all? Fingers crossed!

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Image: Crossing my fingers… by Erica_Marshall