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Contractors to Leave the Public Sector Due to Tax Changes

The IPSE have warned that key contractors will leave the public sector if the government continue with proposed tax changes this year.

Basically, up until now it has been down to the contractors themselves to determine if they have the correct employment status, and this only gets questioned if the Inland Revenue has reason to believe it might be wrong.

With the new changes it will be up to public sector employers to decide the employment status of a contractor, which means they become responsible for putting on employment taxes. Not only that, but it also takes away a lot of control from the contractors themselves, as they could could find themselves labelled as an employee rather than self employed.

In short, things are going to become a lot more confusing for both employers and contractors, and it will no doubt just lead to more paperwork and time wasted phoning up places where they put you on hold for 45 minutes.

When you consider all of this, it’s easy to see why the IPSE are predicting that contractors will leave the public sector in their droves and start looking elsewhere for work. Why continue in a sector that just wants to hold you down, when there are so many other industries out there that are new and dynamic? The choice is going to be clear for thousands of people.

You can be sure the government didn’t think of this when they were sitting around and planning things out. That is the problem with many of these new initiatives…they fail to see the bigger picture.

No doubt the initial goal of all this is to save money for the government, but in the long run they may end up losing money as they find it hard to fill jobs in the public sector.

Actually, it wouldn’t surprise me if the government do a complete U-turn once they see just how many people start to quit. It wouldn’t be the first time they have backtracked on a new policy.

Sure, these kind of things seem like a good idea when you are sitting around in a meeting room in a nice building in the centre of London, but then it gets implemented in the real world and soon becomes apparent that they got it completely wrong.

Who knows though. Maybe the IPSE are off the mark in their predictions, and perhaps the new changes will be a good thing for the public sector. I highly doubt it, but let’s wait to see what happens.

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