Contractors want out of UK

More than half of IT contractors have either left the UK or are waiting to go, a new survey has found.

Contractor portal Shout99, which conducted the research, said prohibitive legislation, the growth of outsourcing and increased red tape have led to widespread feelings of disillusionment about working in the UK.

Susie Hughes, a spokeswoman for Shout99, called for the government to do more to encourage freelancers to stay.

"It's ironic that so many freelancers are looking to move away from the UK at a time when the UK government recognises the need for a flexible workforce," Hughes told vnunet.com.

"There's a general feeling that the government doesn't understand the knowledge-based sector."

The survey results are similar to a poll conducted in March 2000, just weeks before the introduction of controversial tax IR35.

At that time the freelancer market, particularly in IT, was far more buoyant, with greater availability of contracts and higher rates.

"There was also a mood among many freelancers that if the government was intent on making it too problematic to operate their businesses here, then there were plenty of other countries where their skills and knowledge would be valued," Hughes added.

But three years later, figures from the Professional Contractors Group suggest that more than one in four contractors are off-contract, and even those who are working take home on average 50 per cent less than they did this time last year.

IR35 is now established and it is much clearer how freelancers can move outside the confines of the legislation.

But scarcity of jobs, lower rates, abuses of the fast track visa scheme and Section 660, the business tax on family and friends, are all factors encouraging contractors to look abroad for work, said Hughes.

"It's interesting that the initial reaction to IR35 has not calmed down. We have a highly skilled and flexible workforce that will not stay if the climate is not good," she said.

David Rippon, chairman of Elite, the IT director forum, said the survey findings highlighted the reality of supply and demand economics.

"Personally I don't see this as a problem. It's just a normal part of economic life," he said.

"Currently the jobs aren't there but if UK plc starts generating jobs again, rates will go up and contractors will come back."