IT contractors head overseas to escape UK government

Despite government claims that the UK is the best place to work, contractors appear unconvinced with many looking overseas and others looking to full-time positions to escape heavy taxation and unfavourable conditions.

Half of UK contractors plan to change their company structure in the wake of the Chancellor's recent Budget, while a third of contractors say they would now consider a permanent position.

More dramatically, 11 per cent of aggrieved contractors say they now plan to find work overseas, according to research from contractor group Giant.

Matthew Brown, MD at Giant, believes the latest Budget could "hit many limited company IT contractors hard".

In Brown's opinion it was the last thing the UK contractor market needed, just when things were starting to look up after a couple of years which have seen widespread recession and falling rates and employment opportunities.

The key issue is a tax increase on dividends which will force more than half of limited company contractors to reconsider their status.

Brown believes such a combination of factors lowering the number of UK contractors will inevitably impact upon business as a whole as there is a less flexible allocation of skills available to specific projects.