OTS reveals options for IR35 reform: suspend and abolish or enforce more effectively
Contractors genuinely in business can expect to benefit if key interim proposals by the Office of Tax Simplification (OTS) are adopted by government later in the year. In its interim Small Business Tax Review report, the OTS recommends suspending IR35 prior to abolition, or retaining the tax law but forcing HMRC to be clear and consistent on its enforcement. A third option proposes maintaining the status quo but adding an objective ‘in business’ test. Whichever of these options ministers choose after the final report is published this summer, genuine contractors should have little to fear and may even expect an improvement over the uncertainty suffered by many for over a decade. More…
OTS tax director claims proposed income tax and NI merger is unlikely
Contractors expecting a quick tax simplification fix as a result of merging income tax and National Insurance Contributions may be disappointed, following comments by OTS Tax Director John Whiting in an interview with in AccountancyAge. Just hours after proposing to merge tax and NI as one of the options in the OTS’s interim Small Business Tax Review report, Whiting was reported by AccountancyAge’s Jaimie Kaffash as saying: “I do not think we will get a complete merger.” But Whiting did suggest that significant benefits were still possible through closer synchronisation of income tax and NI. More…
Contractor group calls on Chancellor to suspend and then abolish IR35
Contractor group PCG’s response to the possible IR35 reforms proposed in the Office of Tax Simplification’s (OTS) interim Small Business Tax Review report has been to urge Chancellor George Osborne to suspend IR35 and then abolish IR35. PCG Chairman Chris Bryce, who also sits on the OTS Consultative Committee, identified the ‘in business’ test as a potential alternative, but rejected the recommendation for tighter, but fairer, enforcement by HMRC. He says: “PCG has worked tirelessly on the ‘business tests’ as another potential way forward. However keeping IR35 unchanged but with improved HMRC administration is not a valid solution to IR35 and PCG could not accept this.”
Contractor recruiters confirm ‘IR35 is not effective in its current form’ – REC survey
Contractor recruiters have shown solidarity with contractors by giving IR35 a resounding thumbs down. According to the results of a survey conducted by the Recruitment and Employment Confederation (REC), 92% of recruiters believe that ‘IR35 is not effective in its current form’. Half of those recruiters surveyed, drawn mainly from areas such as technology, IT, engineering and interim management, would prefer IR35 abolished altogether and 38% want greater certainty for all concerned.
Contractors will soon receive government guidance on Agency Workers Regulations
Contractors are set to receive the government’s draft guidance on the Agency Workers Regulations by the end of March 2010, reports the Association of Recruitment Consultancies (ARC). According to ARC, the draft guidance will only be open for consultation for a fortnight, which could lead organisations to implement the wrong AWD measures, as ARC’s Ben Grover explains: “Many have been waiting upon the guidance before deciding which strategy to follow. The danger, however, is that people may take the draft guidance as read, and perhaps change their strategies prematurely even though the final guidance may in fact be different.” More…
Contractor demand increases as online recruitment reaches a two-year high
Online demand for contractors increased across all the major contracting disciplines in February, as across the board online recruitment reached a two-year high last month. February’s Monster Employment Index revealed that online demand for IT workers rose by 9.7% month on month, and online demand for engineers rose by 15% in the same period. Monster UK & Ireland’s spokesperson Isabelle Ratinaud was upbeat about February’s index: “It is a significant milestone to see recruitment at its highest level since December 2008 and trends indicate a positive outlook for most UK industries.” More…
Contractor vacancies at 44-month high following 18 months of sustained growth
Contract and temporary worker vacancies are at their highest level since July 2007, and demand for contractors has risen continuously over the last one-and-a-half years. This is according to the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs, which also shows engineering and construction contractors leading the demand tables, with IT contractors in third place after blue collar manufacturing workers. “The encouraging trend which started in January continued last month with…temp billings showing their strongest increase since May 2007,” explained KPMG’s Head of Business Services Bernard Brown. “This might be an indication that a private sector led recovery is indeed under way.” More…
IT recovery more robust than after any previous recession and set to expand by 7% in 2011
IT contractors look set to benefit from significant investment into IT software, systems and infrastructure in 2011, according to research by IT sector analysts IDC. This follows a year in which global growth in IT and telecoms reached 6%, to hit a value of almost $3 trillion. According to IDC’s IT markets and strategies specialist, Stephen Minton, the unexpectedly strong performance of the global IT industry followed similarly strong growth of the global economy. He says: “With business profits and stock markets back into a cycle of growth, many organisations took the opportunity to make up for lost time by upgrading mission critical systems and infrastructure over the course of the year.” More…