New laws target contractors using trusts
Contractors using trusts and other financial vehicles as tax-avoidance schemes may find their income subject to new income tax and National Insurance Contributions liabilities. This follows the introduction of ‘disguised remuneration’ laws in next year’s Finance Act designed to treat monies received from trusts, such as Employee Benefit Trusts, as if they are earned income and tax them accordingly. Anti-forestalling rules mean that contractors using EBTs will have been affected from 9th December 2010. More…
Contractor expert clarifies umbrella company contractor status under new tax laws
Umbrella company contractors will not be affected by the new ‘disguised remuneration’ laws designed to target contractors trading via trusts. This is according to Parasol Chief Executive Rob Crossland, seeking to clarify confusion that has arisen in some contracting media over who the new legislation will target. Crossland explains: “There must be a distinction made between umbrella companies who work closely and openly with HMRC in order to protect contractors, and companies that exploit loopholes and make bold or unrealistic claims about take-home pay. Correctly structured and compliant umbrella companies have nothing to fear from the Finance Act.” More…
Online contractor demand falls in November, but outlook still positive
Online demand for contractors across the IT, telecoms, engineering and construction sectors fell in November, according to the Monster Employment Index. Overall, the index fell by 6% from October, but has grown 12% year on year. IT leads the annual growth league, with online IT demand increasing by 24% compared to November 2009. Although the month’s figures have not followed typical November patterns, Monster UK & Ireland MD Julian Acquari believes the outlook is still positive: “…long-term recruitment growth remains positive, the pace of job creation over the past two quarters was faster than any time since the 1980s.” More…
Further uncertainty for IT contractors as City job numbers decrease
Prospects for IT contractors working in London’s financial centre were dented by November’s drop in City job vacancies by the 5% reported by the Morgan McKinley London Employment Monitor. As the City is the largest consumer of IT contractors in the UK, IT contractors’ fortunes and the financial services sector’s performance are closely aligned. However, it’s not all bad news for contractors as Andrew Evans, Managing Director of Morgan McKinley Financial Services, blames the fall on seasonal factors: “The fall in new jobs available across the financial services sector in November 2010 is not surprising and is consistent with the time of year when recruitment activity traditionally slows ahead of bonus payments.”
Self-employment at record high as workers choose contracting
Contractors and freelancers are making up an increasing proportion of the UK’s labour force, with many more people choosing self-employment. According to the latest Labour Market Survey from the Office of National Statistics, at the end of October there were 3.972m self-employed workers representing about one in seven of the UK workforce. The figures, which show the first increase in unemployment in six months, also reveal that government austerity measures are impacting negatively on public sector employment, with 33,000 public servants becoming unemployed between August and October.
No impact on contractors from the Office of Tax Simplification interim report
Contractors will remain unaffected by the latest measures proposed in the interim report published by the Office of Tax Simplification. The progress report analyses 13 tax reliefs, of the total 1,042 identified in November, and now OTS is requesting feedback from industry and tax professionals before making recommendations to ministers. OTS tax director John Whiting says: “This is a progress report and we are keen to hear views on how we have analysed the 13 reliefs in this report – especially thoughts on whether we are approaching this in a way people support, focusing on reliefs that are no longer used, or are too complex and burdensome to be properly effective.” More…
Discontent amongst permanent IT professionals could swell contracting ranks
Permanent IT professionals look set to desert their employers in droves, and this may lead to an increase in IT contractors, according to a survey by The IT Job Board. A whopping 85% of those questioned plan on jumping ship post-recession, and 80% will be seeking alternative employment in 2011. Such huge levels of discontent appear driven by poor management, as half those questioned claim that their lack of loyalty was down to management not listening, whilst 46% claimed their employers cut corners. More…
Contractor opportunities to be driven by skills shortages
Contractors could see demand for their skills increase in 2011 as a report reveals that 43% of UK managers don’t believe their organisations have the right skills in place. The report, Future Forecast by the Chartered Management Institute, says that 58% of managers feel the main reason objectives won’t be met in 2011 is down to skills shortages. Canny contractors who invest in their own development can target organisations suffering skills shortages and offer themselves as a low-risk alternative to a permanent employee, thus securing contract opportunities in 2011. More…
Contractors supporting retail have benefitted from the sector’s strong year-on-year growth
Contractors working for retail clients, or firms that support the retail sector, have benefitted from strong year-on-year growth and six months of consecutive strong sales growth, according to the latest Confederation of British Industry (CBI) Distributive Trades Survey. Furthermore growth in retail spending is expected to continue in January, albeit at a slower pace. The best performing retail sectors are DIY and hardware, clothing, department stores and grocers.