The recent UK local elections have unfolded against economic uncertainty, with ramifications extending into various sectors, including the temporary labour market.
With the umbrella sector still awaiting any tangible action from the current government's “Tackling non-compliance in the umbrella company market” consultation paper and a great deal of unrest still surrounding IR35, will a change in government bring more clarity and direction to the sector?
Would a Change in Government Assist the Temporary Labour Sector?
In light of the floundering economy and cost-of-living crisis, it's unlikely that any government would dare depart too far from the current government's pledges to stimulate economic growth.
However, one significant aspect that could be affected by a change in government is the regulatory framework surrounding labour laws. The Labour Party Deputy Leader, Angela Rayner, already outlined her party's intention to strengthen worker's rights within their first 100 days in office at last year's Labour Party conference.
Should they win the next general election, as local election results might suggest, would Labour's New Deal for Working People be a positive step for the sector?
The answer is, of course, debatable. However, Labour's intention to create a single status of 'worker' for all but the 'genuinely self-employed' could have far-reaching consequences on legislation such as IR35 and may prompt a re-think of the legislation altogether.
Conversely, the recent local election results could see the current government relax or amend IR35 legislation to provide greater flexibility for companies and contractors in return for gaining votes before the next general election.
Compliance and Tackling Tax Avoidance are Likely to Remain Priorities
Regardless of which party holds power after the next general election, compliance and tackling tax avoidance within the umbrella sector will likely remain high priorities.
The scale of non-compliance in the umbrella company market and the detrimental impact that it has on workers, taxpayers, and the labour market will remain firmly in HMRC's sights, and we could yet see a further response to the “Tackling non-compliance in the umbrella company market” consultation paper before the general election.
At Champion, we'll continue our course of compliance and quality assurance in readiness for whatever changes and challenges a general election presents. Our SafeRec umbrella company certification and FCSA accreditations provide the protection and security agencies and their end clients need from an umbrella provider, especially during times of uncertainty.
Find out more by contacting the Champion Contractors team on 0161 703 2549 or email info@championcontractors.co.uk.
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