Professional Contractors Group
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The Professional Contractors Group (PCG) is a British organisation formed in 1999, initially as a protest group against the IR35 tax statute. Later, its responsibilities were expanded to cover the interests of freelance consultants and contractors such as those affected by IR35. PCG therefore became a full representative body, in the form of a company limited by guarantee. It is a not-for-profit organisation owned and run by its members. Anyone may join, and while often a member will run their own limited company which sells their services to clients, sole traders and contractors operating via partnerships or umbrella companies are also well represented within the membership. It represents members in numerous sectors, including IT, engineering, project management, architecture, oil and gas extraction and marketing.
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[edit] Issues on which PCG has campaigned
- IR35: PCG challenged this legislation with a judicial review and continues to lobby for its replacement.
- S660A: PCG is taking the first test case on this issue through the courts and continues to lobby government for the reversal of HMRC’s new interpretation of the statute.
- IR591: In his Pre-Budget Report of 2003, Gordon Brown announced plans for a new tax measure aimed at freelance contractors, but did not publish any details for consultation. PCG lobbied the government extensively and launched a public campaign: the resulting measure, a 19% corporation tax rate for firms with profits of less than £50,000 and the abolition of the zero starting rate introduced a couple of years previously, was the "least worst" of all possible outcomes.
- Agency Regulations: in 2002 the government introduced a set of regulations covering all workers who acquire work via recruitment agencies. PCG negotiated successfully to secure an opt-out from the regulations for contractors.
- Software patents: although not an IT specific organisation, PCG responded to the concern expressed by its members in IT at the proposed directive on the patentability of computer-implemented inventions, commonly referred to as the software patents directive. As the UK’s IT bodies were all in favour of software patents, PCG campaigned against the directive. The European Parliament rejected the directive on July 6, 2005.
- Work permits: from 2000, the IT contracting market became depressed, yet the government still listed IT as an area in which skills shortage existed and therefore gave prioritised entry to the UK for IT workers from overseas. Lobbying by PCG led to IT being removed from the skills shortage list in 2002.
- Offshoring: PCG has undertaken the first empirical study of the effects of offshoring (whereby a company’s IT services, for instance, are performed by a service provider in another country), which suggests that the cost benefits promised on paper often fail to materialise in practice. PCG is campaigning on this issue because the UK’s IT bodies do not see it as a problem, although it is increasingly also becoming an issue in other sectors represented by PCG.
- The Temporary Agency Workers directive: it was for some years a concern to PCG that this directive, intended to provide rights to vulnerable workers, risked entangling professional contractors who did not require protection. The directive was withdrawn in September 2005, although the European Commission has reserved the right to revisit the issue in the future.
[edit] Member services
PCG offers its members a range of services as part of its membership package. These include:
- Tax and legal helplines
- Insurance cover against disputes with the Revenue
- Access to members-only discussion forums
- Standard template contracts
- Extensive guidance documents on IR35, S660A, agency regulations and how to go about setting up as a freelance contractor
In addition, PCG runs a number of schemes for the benefit of its members, including:
- PCG QS (Quality Systems), the world’s first ISO:9001 certification system designed specifically for small businesses, by which businesses can gain full certification for less than a tenth of the normal cost.
- An Approved Contract Scheme whereby agencies who offer contacts that are sound both commercially and from a tax perspective are marked as PCG approved.
[edit] Structure of the Professional Contractors Group
PCG is ultimately run by its members. They vote annually to elect a Consultative Council (CC) of thirty members, of whom 15 are re-elected each year. Annually the CC then elects a non-executive Chairman and a non-executive Board of Directors from among the CC. PCG’s staff are accountable to this Board. PCG’s central offices are based near Heathrow airport.
