Contractor demand reaches record levels for second consecutive month
Contractor and employee demand across the UK reached record levels for the second consecutive month. The Reed Job Index, which measures jobs growth by counting actual job board vacancies, grew by a modest 1% between February and March 2013; but that was enough to beat February’s record level, and there are 8% more opportunities when compared to March 2012. “Our March figures show there has been a clear and continuing trend for growth throughout the first quarter of 2013,” explains reed.co.uk chairman James Reed. “There has been a very significant 10% increase in the number of jobs available compared with this time last year.” More...
Contractor demand softens during March, countered by upbeat predictions for Q2
Contractor demand softened during March 2013, according to the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs, and in contrast to the Reed Job Index results above. However, growth in all core contracting disciplines continued, and another labour market survey, the BDO Employment Index, is predicting increased private sector hiring for the first time since August 2011. Skills shortages are contributing to the softening market, as REC chief executive Kevin Green explains: “Recruiters…are struggling to find people with the right skills and experience. It’s a worrying trend that is particularly problematic across IT and engineering and at senior levels in other sectors.” More...
It’s official: contractors save their clients money, confirms EC report
Contractors save their clients an average of 15% of ‘non-wage costs’, which include items such as social security, compared to the cost of hiring an employee. This is according to European Commission (EC) report into hourly labour costs across the European Union (EU), which shows UK workers, including employees and contractors, earn an average of €21.60 (£18) per hour. Although the savings made by UK clients when hiring contractors is significant, the average non-wage costs across the EU is 23.7%, and in France it is 33.6%, the highest of all 27 member states. More...
Contractors deserve a modernised VAT system, says CIOT
Contractors should be provided with a modernised VAT system that reduces “the number of exemptions and exceptions”, making it simpler and cheaper for contractor limited companies and other small firms to administer the tax. That’s according to the Chartered Institute of Taxation (CIOT), which has marked VAT’s 40th birthday with an analysis of what VAT covers. CIOT deputy president and PwC VAT partner Stephen Coleclough notes: “The watchwords for VAT reform should be simplicity, certainty and proportionality. Anthony Barber, the Chancellor who introduced VAT, promised it would be simple. We are a long way from achieving that!”
HMRC’s new Real Time Information could lead to more contracts
Contractor clients may be facing “significant” extra work as a result of HMRC’s Real Time Initiative (RTI) for Pay As You Earn (PAYE) income tax, reports The Telegraph’s Rowena Mason. HMRC told her that “its official estimates about the impact on businesses ‘may not be accurate’”. Contractors may actually benefit as a result of this, as clients won’t have to apply RTI when processing contractor invoices, making hiring workers using a contractor/freelancer model more attractive. More...
Contractor clients’ insolvency rates fall, offering greater security to contractors
The insolvency rates among contractor clients’ fell during February 2013, reducing the likelihood of contractors being left unpaid by clients going bust. The latest Business Insolvency Index from Experian shows insolvency rates in the 101-500 employee and 500 plus sized-company categories both falling. However, IT contractors should remain on their guard, as the index shows that the sector was alone in experiencing an increase in insolvencies during February. Max Firth of Experian Business Information Services is upbeat about the results: “The falling insolvency rate among UK’s larger firms will impact positively on the wider supply chain, often smaller businesses.” More...
Contractors contribute to “near record growth in service sector exports”: BCC
Contractors played their part in contributing to what the British Chambers of Commerce (BCC) is calling the “near record growth in service sector exports”. This is despite the UK’s overall trade deficit increasing to £3.6bn in February 2013, from £2.5bn in January 2013. According to data from the Office for National Statistics, the UK services exports surplus is £5.8bn. Much of this is accounted for by financial and professional services, both of which feature large numbers of contractors across all disciplines. More...
Contractors with offshore/overseas assets face further compliance action
Contractors with assets held in offshore or overseas bank accounts may be the subject of a new tax evasion campaign. The UK government has reached agreement with France, Germany, Italy and Spain “to develop and pilot a multilateral tax information exchange”. The agreement is expected to lead to automated information exchanges to identify taxpayers with undisclosed funds held overseas. Under the terms of an earlier agreement, contractors with assets in the Channel Islands or Isle of Man have until 30 September 2016 to disclose hidden assets or they face steep penalties.
Contractors trading as sole traders and partnerships benefit from new simplified self-assessment
Self-employed contractors or freelancers trading as sole traders or partnerships can choose to adopt a new, simplified cash-based self-assessment income tax return. The scheme is only open to the self-employed, so limited company and umbrella company contractors are not eligible, and nor are limited liability partnerships. Contracting businesses with a sales turnover at or below the VAT threshold, currently £79,000, can start using the new cash-based accounting approach from the 2013-2014 tax year. More...