Contractor IR35 reviews well below the number forecast, reveals HMRC
The number of contractor IR35 reviews opened by HMRC since the introduction of its business entry tests in May 2012 is well below the thousands forecast by contracting industry commentators. According to HMRC data obtained by ContractorCalculator via a Freedom of Information request, only 193 IR35 letters have been issued since 1 April 2013, equating to 193 investigations. Of these, 34 have been closed because of “no IR35 liability” and a further “159 enquiries remain open and continue to be investigated”. More...
Contractor pensions, income tax and tax avoidance top Autumn Statement topics
Contractors are set to see pension tax relief fall and income tax rise from 2014, alongside a raft of anti-avoidance measures, following this year’s Autumn Statement by Chancellor George Osborne. The positive news is that the controlling persons legislation proposals have been dropped, with the government admitting that existing IR53 rules are sufficient to catch disguised employees in leadership positions. Engineering and beleaguered construction contractors will benefit from a £5.5bn infrastructure spending boost. More...
Contractors using aggressive tax avoidance schemes in HMRC’s crosshairs
Contractors using aggressive tax avoidance schemes have been warned by the Treasury that HMRC will “close in on those who seek to evade or avoid tax”. A raft of measures announced before the Autumn Statement will see HMRC having an extra £77m in 2013 to tackle “aggressive tax avoidance schemes”, while new legislation will be created to sanction “cowboy advisers” promoting such schemes. The money will also be used to beef-up HMRC’s IT systems to better identify avoidance and evasion risk.
Contractor gender pay gap disappearing, even reversing in some UK regions
The gender pay gap among contractors is disappearing, with female contractors earning as much as, or more than, male contractors. Research by professional employment organisation Parasol shows that, nationally, female contractors are now earning almost as much as their male counterparts. The picture varies significantly across different regions, but in the North East, South West and Scotland a ‘reverse pay gap’ is emerging, with some women earning nearly £4 an hour more than men. More...
Financial IT contractors a step closer to enjoying a Renminbi-generated contract flood
Financial IT contractors may benefit from a flood of contracts if London becomes the western hemisphere’s Renminbi trading centre and the City gears up for new currency trading. At an HM Treasury-hosted London-Hong Kong Renminbi Forum, senior representatives from the London and Hong Kong Offices of ten leading banks in the global Renminbi market met to discuss the latest developments. “Establishing London as the Western centre for Renminbi is a key priority for the UK Treasury and today’s discussion marks further important progress...,” noted financial secretary to the Treasury, Greg Clark.
Contractors must pay fees for pensions and investment advice from 1 January 2013
Contractors seeking professional financial advice on pensions and investments will be required to pay fees from 1 January 2013, as part of the Financial Services Authority’s (FSA) Retail Distribution Review (RDR). Not all financial products are affected and contractors should only be expected to pay fees when being advised on regulated pensions and investments.“Contractors can still seek [unpaid] advice from an IFA on ‘protection gap’ products and on mortgages,” explains an expert independent financial adviser (IFA). More...
Energy contractors face future dominated by gas-fuelled generation technologies
Energy contractors are facing a future where gas-fuelled power stations look set to dominate the energy generation market, before new nuclear and renewables take over in the longer-term. The government’s Gas Generation Strategy sets out plans to build up to 26GW of new gas-generating capacity by 2030. Alongside its gas strategy, the government is also considering whether to allow further shale gas exploration and production using ‘fracking’ technologies.
Contractors facing uncertain market conditions across all sectors
Contractors continue to face uncertainty across all core contracting sectors. The three major Markit/Chartered Institute of Purchasing and Supply (CIPS) Purchasing Managers Indices (PMIs) for manufacturing, construction and services varied in performance during November. Manufacturing recovered slightly, although the sector’s output is still shrinking. The construction sector displayed another month of sharply falling activity, with the service sector’s output growing, but only slightly. More...
Positive news for contractors with retail clients
Prospects continue to improve for contractors working in the retail sector, as the Confederation of British Industry’s (CBI) latest quarterly Distributive Trades Survey delivers positive news from the high street. Retailers reported improved year on year sales for the third consecutive month, as well as an increase in staff on the shop floor. “The increase in employment, along with expectations for improvement in the business situation over the next quarter, point to a welcome boost to the sector,” says CBI head of economic analysis Anna Leach. More...
Contractors won’t face penalties for Real Time Information (RTI) errors until 2014
HMRC has confirmed that no penalties will be levied until April 2014 on contractors who make errors in their Real Time Information (RTI) submissions. This will provide contractors with a full year to get RTI right following its compulsory introduction in April 2013. Suzanne Newton, HMRC’s programme director for RTI, says: “After stakeholder consultation ... will give most employers a year to get used to reporting in real time before implementing the new penalties.”