'Tax-lock' is Queen Speech's key contractor measure

A bill for enterprise is the meatiest of four areas in the Queen’s speech in terms of potential to affect the UK’s IT contractors and other one-man bands.

The four are small business (the Enterprise Bill); the workplace (HS2; illegal worker controls, EU referendum); ICT (Bill of Rights, data law reform, cyber defence) and personal finance.

But the latter, notably free childcare, pensions and the personal allowance, is close to a fifth area – tax, which an umbrella says the speech's announcement on will positively affect all contractors.

“The references [in the Queen’s speech] to income tax, VAT and NI” sound auspicious for contractors, explained Paraplus, citing Her Majesty’s announcement of a five-year ‘tax lock.’

However Phil McDonald, the umbrella firm’s managing director, cautioned that contractors would want to see the “finer details… come out in the wash” before they celebrate.

Yet assuming no nasty surprises, the freezing of PAYE, VAT and NI should indeed “serve to help smaller businesses...thrive,” confirmed industry body the Freelancer and Contractor Services Association.

And on behalf of company directors, the Institute of Directors is also glad that the first ‘Tory-only’ Queen’s speech in about two decades offers a tax freeze.   

“[Our] members are opposed to increases in the rates of VAT, Income Tax and National Insurance,” reflected Simon Walker, the IoD’s director-general.

“[But] we consider it imperative that the government’s commitments do not prevent bold tax reforms to both simplify taxation and reduce the burden upon businesses and individuals.”

He gave an equally guarded welcome to the Enterprise Bill, which the Queen referred to saying, “measures will also be introduced to reduce regulation on small businesses”.

“The government has got off to a solid start…with a focus on reducing red tape for small and medium sized businesses. But good intentions are nothing without delivery,” Mr Walker said.

“Companies will [now] be looking to the Business Secretary to spell out exactly where he will find £10bn worth of cuts to regulation.”

The lack of detail has not gone unnoticed by the CBI, which is wary about the conciliation service to help tackle payment issues between one-man bands and the likes of its members.

It said: “We want to see more details on how the Small Business Conciliation Service will work in practice...customers and suppliers should deal directly to reach agreement wherever possible.”

The Federation of Small Businesses also wants to hear about the mechanics of the service, which it regards as long overdue.

“Small businesses often have the law on their side, but find accessing the legal system complex, time consuming and expensive,” said the FSB's chair John Allan.

“A properly constituted conciliation service should help with this and go some way to addressing major problems like the UK’s poor payment culture.”

Members of all three enterprise groups will likely welcome a green-light in the Queen’s speech to continue legislating for high-speed rail links between different parts of the country.

The members could also be affected by a modernising of the law on communications data, and a vow from ministers to continue reducing the threat from cyber attacks.

Also pledged by Queen Elizabeth II yesterday was the government’s decision to bring forward proposals for a British Bill of Rights, due to be consulted on to replace the Human Rights Act.

Designed to give police and law enforcement agencies greater access to communications data, the bill was not committed to by the Queen, as human rights campaigners had hoped.

Just as contentious are new measures incoming on illegal workers. The IoD warned: “Proposals to charge employers who employ migrants an additional levy will add further costs on top of visa fees.”

The CBI issued an alert as well: “There is an enormous difference between exploitation, which is a serious crime, and typical employment law disputes, which have well established routes to resolution. That distinction must be maintained.”

Elsewhere in the government’s legislative programme, the Queen said that measures would be put in place to provide an in-out referendum on membership of the European Union before the end of 2017.