Contractor umbrella companies raise concern over T&S changes
Umbrella contractors may find companies are reluctant to process expenses thanks to unease over new travel and subsistence (T&S) rules amongst umbrella firms. Attendees at the Freelancer and Contractor Service Association Compliance Seminar expressed concern over rules surrounding ‘supervision, direction or control’ (SDC), the burden imposed on umbrella companies and the lack of clarity offered by HMRC. HMRC representatives were also in attendance to answer questions on the proposed IR35 reform in the public sector and contracting stakeholders took issue with them over HMRC’s ambitious plans for its online IR35 tool and several perceived impracticalities of the new model. More...
Contracting bodies urged to oppose public sector IR35 reforms
Contracting bodies are being urged to get involved in the summer consultation on public sector IR35 reforms as experts warn the regime must be shut down before it causes real damage to the contracting sector. Capita head of employment taxes Stuart Farrow-Smith warns that an extension of the policy into the private sector is: “a matter of when, not if”. “Those who get a chance to respond to the consultation, please do,” adds ContractorCalculator CEO Dave Chaplin. “IR35 rules were changed to how they currently stand in 1999 because of fierce lobbying. The same fight needs to be fought again, 17 years later.” More...
Contractor clients receive further guidance on SDC
HMRC has published updated guidance on SDC for contractor clients and agencies, following the implementation of new T&S regulations for umbrella contractors. With many agencies likely to assume the contractor is under SDC to avoid risk, the contractor will essentially be responsible for proving SDC doesn’t apply to them. However, the ambiguous guidance notes that HMRC isn’t prescriptive on what evidence it would find persuasive in determining where SDC applies, insisting: “it will depend on individual arrangements”. Contractors who want to continue claiming T&S expenses relief are advised to pay close attention to job specifications and their actual working arrangement. More...
Contractor demand benefits from economic uncertainty
Contractor placements accelerated in March, seemingly as a result of economic uncertainty caused by the looming EU referendum. The Recruitment and Employment Confederation’s (REC) latest Report on Jobs shows that firms are looking to maintain capacity to meet rising demand without leaving themselves vulnerable in the event of a Brexit, with contractors providing a low-risk option. Whilst contractor agency billings growth rose to a four-month high, vacancies also continued to rise. Meanwhile, contractor availability continued to decline. However, the fact that the latter two did so at moderated paces suggests that skills shortage pressures appear to be easing slightly. More...
Fintech sector offers bright spot as Brexit fears stunt contractor demand
Finance and IT contractors in the capital continue to see opportunities in the emerging Fintech sector, although overall demand has fallen as a result of macroeconomic factors. Morgan McKinley’s March 2016 London Employment Monitor reports a 13% decline in demand for professionals, month-on-month. The number of applicants has also fallen by a quarter since February. “With reports of a slowing economy, redundancies and the Brexit referendum, it’s little wonder that the figures are showing a decrease,” comments Morgan McKinley Financial Services operations director Hakan Enver. “However, Fintech firms are still hiring actively and they are able to attract top candidates.” More...
SNP considers options for amendments to T&S rule changes
The Scottish National Party (SNP) is considering options for proposed amendments to the Finance Bill to challenge recent changes to T&S relief for contractors, Recruiter reports. Many umbrella contractors, as well as personal service company (PSC) contractors caught by IR35 are now unable to claim expenses relief, according to new rules. SNP Treasury spokesman Roger Mullin described the changes as an act of “social and economic injustice” during a Parliament debate on the Finance Bill this week. Meanwhile, an SNP spokesperson has confirmed that the party is: “looking at a range of options and will continue to oppose and seek to challenge changes”. More...
Contractors and SMEs seen as “soft targets” in HMRC corporation tax clampdown
Contractors and SMEs are being disproportionately targeted by HMRC in its bid to reduce the £3bn corporation tax gap. Economia reports that HMRC raised an additional £489m in corporation tax after investigations into “soft target” small firms. “HMRC appears to be aggressively going after small businesses as ‘easy pickings’ and it’s possible they will look to accelerate investigations next year and beyond, rather than going after big enterprises,” warns Roy Maugham, partner at UHY Hacker Young. Maugham also notes that such enquiries disproportionately impact contractor profits as a greater portion of their resources have to be devoted to dealing with tax probes. More...
HMRC responds to OTS Small company taxation review
HMRC has issued a response to the Office of Tax Simplification’s (OTS) ‘Small company taxation review’, which could have repercussions for contractors if proposed measures are implemented. Virtual tax partner support provider Ross Martin reports that HMRC has accepted numerous proposals for further consideration. These include the proposal to develop a ‘look through’ system which would see company shareholders taxed directly on company profits instead of the company paying corporation tax. The OTS has also been asked to further develop an outline for a ‘sole enterprise protected assets’ trading vehicle for the self-employed. More...
Contractor demand driven by need for specialist project management skills
Finance contractors with project management or business transformation skills are set to see rising demand over the next twelve months. This is according to new research from recruitment consultancy Robert Half, which shows that 90% of finance directors (FD) and chief financial officers (CFO) plan to engage interim managers over the coming year. Project management is the most sought-after skill amongst respondents (46%), whilst increasing digitisation across the sector means experience in business transformation is also highly regarded (34%). 82% of FDs and CFOs value interim managers for their efficiency, whilst 84% consider them to be cost-effective in achieving business goals. More...
IT contractors with niche skills in high demand
IT contractors with web development expertise have seen demand for their services accelerate over the beginning of 2016, Staffing Industry Analysts reports. Research by recruitment finance provider Sonovate shows that contract web developer demand in the UK rose by 22% between Q4 2015 and Q1 2016. The research was taken from an analysis of postings on job boards, with website developers (206%), web application developers (127%) and senior web developers (84%) enjoying a particular acceleration in demand. “Good qualified talent is highly coveted across all niches,” highlights Sonovate co-CEO Richard Prime. “It’s an excellent time to enter the job market.” More...