IR35 Forum: HMRC still evaluating discussion document responses
Contractors will welcome the news that HMRC is still evaluating the responses to the IR35 discussion document consultation before implementing further changes. The confirmation was made within the latest IR35 Forum minutes from 15 December 2015. However, not included was confirmation that no proposed changes would be made to IR35 within the Finance Act 2016. “We’d been led to believe that HMRC is planning no changes to IR35 until 2017,” notes ContractorCalculator CEO Dave Chaplin. “We’ll be following-up with HMRC and Forum members to establish what HMRC did commit to.” More...
Contractors encouraged to seek overseas opportunities
Contractors are benefitting from global demand growth trends as more businesses feel the effects of increasing skills shortages. ManpowerGroup’s 2015 Talent Shortage Survey reveals 38% of international firms are struggling to fill roles. Despite reports of deepening skills shortages, the UK appears comparatively well-equipped to deal with recruitment challenges. Only 14% of UK businesses report difficulties acquiring talent, suggesting contractors who are struggling to source UK-based contracts may find greater success overseas. “Hong Kong could prove a prosperous destination for finance contractors, whereas engineering or construction contractors may consider taking advantage of the considerable demand in Germany,” highlights ContractorCalculator CEO Dave Chaplin. More...
Contractors key to driving business innovation: REC JobsOutlook
Contractors are set to continue to benefit as more firms look to hire contingent staff to take advantage of improving market conditions. The Recruitment and Employment Confederation’s (REC) JobsOutlook for January 2016 shows that almost half (48%) of clients intend to increase their contractor headcounts over the next three months, whilst 51% plan to maintain contractor numbers - with medium-term prospects looking similarly promising. Meanwhile, 82% of firms report to engage with contractors to gain short-term access to key skills, emphasising the tangible benefits contractors provide in supplementing business innovation. More...
Contracting records moderate growth in key economic areas at start of the year
Contractor prospects look positive, if slightly muted, at the start of the year. This is according to the Purchasing Managers’ Indexes (PMIs) for January 2016 from Markit and the Chartered Institute of Purchasing and Supply (CIPS), which “collectively point to a slight upturn in the rate of economic growth”. This is resulting in rising contractor demand in the construction and service sectors. Unfortunately, manufacturing contractors have suffered from headcount reductions as a result of reduced backlogs of work. This month’s PMIs highlight:
- The UK Manufacturing PMI rose to a three-month high in January, driven largely by an increase in production due to rising domestic market demand. However, a substantial reduction in backlogs of work left a number of firms with spare capacity, resulting in a moderate reduction in staffing levels.
- “UK construction firms struggled for momentum at the start of the year,” as output increased during January, but at its weakest rate since April 2015. The UK Construction PMI indicates that job creation also continued to rise at a similarly moderated pace as a result of reduced optimism about business outlook. Nonetheless, respondents remained upbeat about growth prospects over the next 12 months.
- The UK service sector recorded another solid rise in output in January, extending the current period of service sector output growth to over three years. The UK Services PMI attributes much of this to a sharp increase in new business, which has also contributed to an acceleration in terms of job creation following on from December’s five-month low.
Contractor confidence boosted as a result of shelved government tax plans
Contractors are reporting improved confidence in both their business performance and the UK economy, following record low figures the previous quarter. The Freelancer Confidence Index for Q4 2015 from the Association of Independent Professionals and the Self Employed (IPSE) largely attributes the improved outlook to the Government’s decision not to pursue changes to the taxation of limited company contractors. Overall, 35% of contractors also reported greater confidence in their business outlook for 2016. “[This] shows just how big an impact government intervention can have on how people feel about running their business,” highlights IPSE CEO Chris Bryce. More...
IT contract talent pool widens, survey shows
Contracting is becoming an increasingly popular career choice for IT professionals looking to take advantage of worsening skills shortages. Demand for web and software experts is expected to rise at five times the market rate, and new immigration laws are expected to reduce the already stretched IT talent pool further. As a result, IT recruiters report that more professionals are looking to charge a premium for their services by pursuing contract opportunities, with research by Computer Weekly showing that 84% of recruitment bosses in the IT sector report an increase in demand for contract roles amongst professionals, rather than permanent positions. More...
Contract-rich market stems from worsening skills shortages
UK contractors are well-placed to take advantage of rising widespread skills shortages, which have increased by 130% since 2011, according to the UK Commission for Employment and Skills’ (UKCES) Employer Skills Survey 2015. Figures indicate that there are now 209,000 “skills shortage vacancies” in the UK, accounting for almost a quarter of all job openings. The density of reported skills shortages (the number of skills shortage vacancies as a proportion of all vacancies) is particularly high in the construction (34%), manufacturing (30%) and finance (21%) sectors. More...
Contractors encouraged to appeal tax deadline penalty
Contractors who missed the self-assessment tax return deadline are being urged to appeal penalties if they believe they have a reasonable excuse, AccountingWEB reports. The Low Income Tax Reform Group (LITRG) notes that many contractors may have been affected by extenuating circumstances, preventing them from making the deadline and incurring the £100 penalty in the process. HMRC indicates that almost 1m people missed the 31 January deadline this year, an increase on the 890,000 who missed the deadline last year. Death of a spouse, serious illness, computer failure, postal delays, and fire or flooding are all amongst the reasonable excuses, as listed by HMRC. More...