Contractor prospects remain strong despite Brexit concerns: REC JobsOutlook
Contractor clients continue to look towards contractors as means of driving business innovation and growth, as concerns over the looming EU referendum appear to be having little impact upon business sentiment. The Recruitment and Employment Confederation’s (REC) JobsOutlook for March 2016 shows that 97% of contractor clients plan to either increase or maintain contingent headcount over the next three months, with 95% planning to do so over the remainder of the year. Meanwhile, 91% of clients report engaging with contractors to provide short-term access to key strategic skills, emphasising the important role contractors play in business development. More...
Contractor demand continues strong long-term growth trend
Contractor demand continues to display strong long-term growth as the latest figures from the Association of Professional Staffing Companies (APSCo) reveal contract vacancies have increased by 7%, compared with this time last year. The driving force behind the growth was again the finance sector, where contractor demand enjoyed an 85% upswing. However, as executive director of global research for Staffing Industry Analysts John Nurthen highlights, recruiters are experiencing difficulties filling the vacancies: “While contractor placements are up 4% over the prior year, growth has been failing to keep pace with the volume of vacancies received – rather indicative of a market experiencing skills shortages.” More...
HMRC brings in increased tax yield from contractors and SMEs
HMRC has collected an additional £470m in tax following investigations into the tax affairs of contractors and other small businesses (SMEs) in 2014/15, Tax-News reports. This is according to research by accountancy group UHY Hacker Young, which claims contractors and SMEs are seen as a “soft target” for HMRC, whose tax yield from large businesses fell by 13% to £3.5bn in the same tax year. “Small businesses have already felt the effects of the taxman’s tougher approach to compliance, and the target to bring in billions more may lead to HMRC squeezing every pound it can from SMEs,” notes Roy Maugham, tax partner at UHY Hacker Young. More...
Clampdown on late payments by contractor clients suffers setback
Contractors will have to wait several more months for new rules tackling late payment by large companies to come into effect, This is Money reports. The rules, which were due to come into force next month, require large companies to disclose their payment terms in an online portal. This will include details of the average time taken to pay contractors and other suppliers. The announcement was initially made by former Business Minister Matthew Hancock. However, responsibility for the plans now rest with Minister for Small Business Anna Soubry, who has postponed the implementation of the rules until October 2016. More...
Government publishes Finance Bill 2016
Numerous tax changes impacting contractors have been tabled, following the publication of the Finance Bill 2016. The draft legislation is due to receive Royal Assent in July following debate in Parliament on 11 April, and implements changes announced during the Budget 2016, Autumn Statement 2015 and Summer Budget 2015. These include the reduction in Corporation Tax, reduced taxation of the oil and gas sector, and measures to reduce tax avoidance. “This legislation will see workers keep more of their pay-packet and reduce the burden on businesses so they can invest and create jobs,” explains David Gauke, financial secretary to the Treasury. More...
Finance contractor demand expected to stall as client optimism declines
Contractors in the finance sector have been warned that rising demand for their services may flatten out over the next three months, as client optimism worsens. The latest Confederation of British Industry (CBI)/PwC Financial Services Survey shows business sentiment amongst firms has fallen at the fastest rate since 2011, despite promising increases in terms of business volumes (+26%) and employment (+15%) over the last quarter. CBI director for economics Rain Newton-Smith attributes the dip in optimism (-21%) to numerous factors: “Concerns over China and a volatile start to the year for markets, alongside uncertainty about a possible Brexit, have created a perfect storm to dampen optimism in financial services.” More...
Public sector IR35 reforms at risk of legal challenge
Government proposals to reform IR35 legislation in the public sector are to be met with extensive lobbying by contracting stakeholders. APSCo has branded the recent Budget announcement as “unworkable, disproportionate and unreasonable”, claiming it also carries risk of a legal challenge. “HMRC says it will introduce a simple test to help engagers decide whether or not IR35 applies. Given the large body of case law relating to this question, if there were a simple answer, I think the Courts would have found it,” comments APSCo head of external relations Samantha Hurley. More...
Contractor T&S loophole closed in latest Finance Bill
A loophole that could have seen umbrella contractors inappropriately using personal service companies (PSCs) has been closed following the publication of the latest Finance Bill. Recruiter reports that the latest amendments ensure that any company controlled by a managed service provider would automatically be caught by the legislation. In doing so, the Government has closed a loophole that would have allowed umbrella providers to encourage contractors to open PSCs to continue to claim T&S relief. “It is not surprising that the draft legislation has been amended to prevent any potential abuse and we welcome the changes,” comments Freelancer and Contractor Services Association chief executive Julia Kermode. More...
Three in four IT contractors expect remuneration to rise over next year
IT contractors expect to benefit from increases both in remuneration and demand. This is according to giant group’s latest analysis of its contractor database, as reported by Recruitment International, which found that 77% of contractors anticipate their fees will rise over the next year. Meanwhile, the finance sector is expected to be a prominent source of contract opportunities, due to both the rising cyber-security threat and skills shortages. “With a reduced number of permanent experts in the market, firms are increasingly relying on the expertise of specialist contractors,” comments giant group managing director Matthew Brown. More...
Contractors and businesses not prepared for digital tax
Contractors are amongst the majority of UK businesses not ready for the Government’s ‘Making Tax Digital’ regime, reports Economia. This is according to research by the Institute of Chartered Accountants in England and Wales (ICAEW), which shows that 75% of businesses don’t currently maintain their accounts electronically using accounting software. Meanwhile, whilst 55% of respondents support the digital tax plans, only 18% feel it should be compulsory. ICAEW warns that forced implementation looks likely to place a greater burden on businesses who will face additional costs when digital record keeping is made mandatory. More...