General Election 2017 and contractors

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What does General Election 2017 mean for contractors?

Last updated on Tuesday, May 9, 2017

Written by Alex Cadman

As you will know, last month Theresa May called a snap general election to be held on 8th June. Mrs May previously stated she would not call a general election, however she has since conceded that needs to secure a stronger mandate for Brexit negotiations. What does this upcoming election mean for contractors and the contracting industry?

With a general election imminent, hirers and agencies are likely to feel a greater sense of uncertainty, albeit temporarily, until the election has passed and the winning party is announced. This could lead to more short-term contracts available whilst permanent openings are put on hold until the political dust settles.

The Recruitment & Employment Confederation (REC) seemed to have confirmed this prediction in their April 2017 JobsOutlook report, which showed that 84% of UK hirers surveyed planned to maintain or increase agency worker numbers in the short-term.

Other implications of the snap election include parts of the Finance Bill 2017 that were suspended or put on hold to ensure essential proposals pass before the election, some of which affect contractors:

  • The implementation and launch of Making Tax Digital, the quarterly online tax reporting system, was suspended until further notice. Many contractors will welcome this because the change would have forced small business owners to adapt quickly and change their processes to cope with the changes.
  • A plan to slash the tax-free dividend allowance from £5,000 to £2,000 from April 2018 was also scrapped, although reports indicate this measure could be reinstated in the case of a Conservative victory at the election. This would have affected limited company contractors who distribute dividends through their limited companies and would mean more of their distributed dividends would be subject to dividend tax.


There are a number of other issues potentially on the future political agenda, especially if the Conservatives secure a majority win. Alongside the increased likelihood of a “hard-Brexit” happening with a Conservative majority, it is likely the party will revisit the increase in National Insurance Contributions that was scrapped back in March.

The outcome of the general election will also have an effect on whether IR35 legislation for off-payroll workers in the public sector will be rolled out to the private sector, and if so, when this would take effect.

The general election on 8th June will undoubtedly have an affect the contracting industry. Don’t forget, if you’re planning to vote, you must register by the 22nd of May.

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