IR35 reviews double and tax yield increases fivefold during 2011-2012
IR35 reviews and tax yields from HMRC investigations increased substantially during the 2011-2012 financial year. The Financial Times’ Vanessa Holder reports on a Freedom of Information Act request submitted by Bloomsbury Professional, which revealed that there were only 12 IR35 reviews conducted during 2009, raising £219,000 in additional tax. The number of reviews rose to 59 in 2010-2012 and the additional tax raised as a result increased fivefold to £1.25m. Bloomsbury managing director Martin Casimir told the FT: “The crackdown on IR35 fits in with the wider picture of HMRC taking a much more aggressive approach to all sorts of tax cases where it suspects it is missing out on tax revenue.” More...
Contractors emerge largely unscathed after 12 months of AWR
Contractors have remained relatively unaffected following 12 months of the Agency Workers Regulations (AWR) being in force. According to an analysis of the impact of the one-year-old rules conducted by the Recruitment and Employment Confederation (REC), only 4% of contractor clients reported that they had reduced their use of agency workers in direct response to AWR. “One year in, it’s clear to us that there have been only limited problems for businesses,” notes REC’s CEO Kevin Green. “It is recruitment agencies across the UK who have really absorbed the administrative burden and costs associated with the implementation of the new rules.”
IT contractors anticipate more contract opportunities from the public sector
IT contractors are increasingly confident about public sector contract prospects, according to a survey by umbrella services provider giant. The survey shows that 15% of IT contractors expect growth in job opportunities in the public sector, up from just 8% surveyed last year. Despite austerity measures, giant managing director Matthew Brown suggests that public sector organisations see IT as a means to saving money: “Even though budgets are stretched, some departments are keen to kick-start IT projects that might have been stalled or put on hold. After all, many of these IT projects will deliver immediate savings.”
Financial IT contractor prospects dampened as London’s job market slumps further
Financial IT contractors are facing a bleak autumn as London’s financial centre continues to haemorrhage jobs. The Morgan McKinley London Employment Monitor for September shows vacancies down 19% compared to August, and down 43% compared to September 2011. After software developers, the UK’s financial industry is the second largest consumer of IT contractors whose fortunes closely follow the health of the sector. Hakan Enver, operations director of Morgan McKinley Financial Services, is at a loss to explain the figures: “While in the past, there has been greater visibility of seasonal trends across the financial services hiring market, quite the opposite has been the case in the last 12 months.” More...
Oil and gas contracts will increase as tax changes take effect
Oil and gas contractors will benefit directly from a surge of new contracts as a result of changes to the UK’s oil and gas tax regime. In a recent paper, Oil & Gas UK’s economics director Mike Tholen notes that recent tax measures introduced by the Treasury “have allowed global investors to consider projects on the UK continental shelf (UKCS) in a new light.” The measures will increase investment in fields previously not economically viable, maintain investment in older fields and stimulate decommissioning activity, all of which will lead to increased contracts.
Contractors operate in one of the most competitive tax regimes in the world
Despite IR35 and other contractor tax issues, contractors in the UK trade in one of the most competitive tax regimes in the world, and it is steadily improving, according to a report by KPMG. Competitive Alternatives 2012, Special Report: Focus on Tax shows the UK to be in sixth place in the global Total Tax Index (TTI), which aggregates all of the tax paid by businesses in a given tax jurisdiction. The lower the TTI, the more attractive the country is from a business tax perspective.The UK is also ahead of the USA and all European countries analysed, with its score improving by almost 15% since 2010.
HMRC loses tribunal case ruling over Jersey-based bankers’ bonus scheme
HMRC lost an upper-tier tax tribunal case to Swiss bank UBS over an offshore payment scheme. Accountancy Age’s Calum Fuller writes that “the ruling overturned a previous verdict, which had seen the 400 senior [UBS] staff pay income tax and national insurance on £92m received in bonuses through a Jersey-based vehicle in 2004.” As a result of the ruling, UBS can expect to have up to £50m refunded by HMRC. More...
Parasol rebrands as Optionis and aims to offer more services
Contractors are offered an expanded range of services as a result of the rebrand of the company behind Parasol umbrella and ClearSky accountants. Optionis, as Parasol Group will now be known, “will target growth in SME support services and expand its offering to include a broader range of services.” Rob Crossland, chief executive of Optionis says: “Optionis gives us room to innovate and grow our business across a much broader range of activities, which in turn allows the businesses we partner with to get on and grow.” More...
NHS clients don’t want to put their interim management contractors ‘on the books’
NHS clients have little appetite to put their senior interims on the books, as required by the off-payroll rules introduced by the government in September 2012. An illuminating blog by recruiter Steve Melber of interim agency Interim Partners publishes the views of ten senior NHS interims and some of their clients. “One thing that is fairly clear is that my client is very unlikely to make some hasty decision without talking first to their interims – the penny has dropped that this could cause a lot of problems,” comments one interim. More...