Nearly 75% of contractors think that the impending legislation to effectively outlaw Managed Service Companies (MSCs) is unjustified and that it reflects an overall distrust of the self-employed by the British government, according to a survey by contractor accountant JSA.

The research found that 59% of contractors do not fully understand the proposed legislation or the government’s reasoning behind it; the vast majority feel that contractors are being unfairly ‘picked on’.

It found that 40% of respondents say that the new legislation has affected their future plans to work as contractors and of these, just over half say that they will now be looking for a permanent job and expect to earn less as a result.

JSA chief executive Barry Roback says: “It is hardly surprising that contractors are disillusioned by this latest raft of legislation.

“The impending changes have created a lot of extra work - both for contractors and their accountants - without any obvious advantage to anyone. Admittedly there were some rogue operators among firms operating managed service schemes and probably the odd contractor who had pushed credibility to the limit, but it would seem that the Treasury has got the scale of the problem out of proportion.”