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Successful definition of a 'professional contractor' could reap rewards

Published on Feb 3, 2010 |

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Outlining its aims for 2010, Professional Passport believes that a a recognised definition of a 'professional contractor' could reap benefits for contractors, Government, recruitment agencies, and end clients.

In its recent COP survey, over 70% of respondents described themselves as full-time contractors, and saw contracting as a long term career choice. The remainder were part-time contractors, or merely contracting until a suitable permanent position came up. Clearly, there is a distinction between the objectives of these groups.

The majority of career contractors who responded to the survey said they were not seeking any form of protection or employment rights as well as confirming that they believe that they should be treated differently.

As a result Professional Passport is working on a series of definitive benchmarks that, when applied, will define what a 'professional contractor' is.

The organisation says that contractors could benefit in the following ways from such a definition:

Potential benefits for contractors

- Removal from the application of the IR35 rules and tests.

- Removal from the Agency Regulations

- Removal from the Agency Workers Directive (AWD).

- No need for Income Shifting legislation.

Potential benefits to Government

- Aligns to the Government objective of a fairer tax system for all

- Aligns to the Government objective of reducing red tape

- Aligns to the Government objective of simplifying legislation

- Presents no threat to tax revenues

- Reduces the need for further legislation

- Allows compliance resources to be more effectively deployed

Such a definition could also benefit recruitment companies by removing red tape and bureaucracy, and could also benefit end clients due to the removal of any threat of employment rights or tribunals.

Rules should be more accurately targeted

Professional Passport believes that rather than abolishing the current rules in their entirety, a more productive approach would be to ensure these rules are applied in a targeted way addressing areas where the risks are present rather than applying them universally.

Furthermore this would satisfy those contractors who responded to the survey suggesting abolition of certain rules; such as IR35, as they would, in the main, be removed from their application in essence achieving the same result.

You can send feedback on these proposals here.