Public sector contractors face tax avoidance crackdown
Contractors working in the public sector will have their IR35 status determined by their clients from April 2017. This was the most notable policy to emerge for contractors from an otherwise quiet Budget 2016, and is expected to net the Exchequer an additional £12bn in tax. “In every budget I have given action against tax evasion and avoidance that has contributed to the repair of our country’s finances, and this budget is no different,” highlighted Chancellor George Osborne in his speech. More...
Contracting’s stakeholders react to Budget 2016
Contracting stakeholders are disappointed by news that public sector contractor clients are to assume responsibility for determining the IR35 status of contractors from April 2017. “There’s a huge risk of discouraging specialist contractors from lending their expertise to the efficient running of public services,” notes Chris Bryce, chief executive of the Association of Independent Professionals and the Self Employed (IPSE). “We must redress the balance and change the perception that all temporary workers are avoiding paying tax,” adds Freelancer and Contractor Services Association CEO Julia Kermode. More...
Oil and gas contractors boosted by industry tax cuts
UK oil and gas contractors could be set to benefit as a result of a raft of tax cuts announced by the Chancellor in the Budget 2016. The supplementary charge for oil companies will be cut from 20% to 10%. Meanwhile, the petroleum revenue tax will be “effectively abolished”, in a bid to stimulate exploration, investment and eventual contract opportunities. “We welcome these measures as they will build on the industry’s achievements in improving efficiency in the face of low oil prices, boosting the sector’s competitiveness and helping to restore investor confidence,” comments Oil & Gas UK chief executive Deirdre Michie. More...
Contracting body backs calls for review of legislation
Contractor organisation the Association of Professional Staffing Companies (APSCo) has offered its backing to calls for a strategic review into tax legislation affecting contractors, Recruitment Buzz reports. “The sector has been subjected to an onslaught of new legislation over the past few years,” notes APSCo head of external relations Samantha Hurley. “This more considered approach should deliver a framework that will allow the sector to grow and develop in line with government expectations.” The review was initially proposed by contracting trade body PRISM in a bid to secure equal recognition for the contracting sector. More...
Contracting sector reputation at risk from media reports
Contractors are at risk of being ‘tarred with the same brush’ as workers being paid “off the books”. This is according to the which has highlighted that recent media reports of organisations such as Transport for London and the BBC paying workers via cash-in-hand gives a misrepresentation of the contracting sector. “If any contractors at any organisation are working inappropriately then it is unacceptable and should be stamped out now,” claims CEO Julia Kermode. “In reality, most contractors work legitimately and compliantly off payroll.”
Contractor T&S changes lead to “Fairer Tax Relief Campaign”
Changes to tax rules impacting umbrella contractors’ access to tax relief on travel and subsistence expenses have spawned a new campaign from a contractor recruitment trade organisation. The Association of Recruitment Consultancies (ARC) has launched the “Fairer Tax Relief Campaign”, proposing all umbrella contractors should be entitled to tax relief on travel expenses to maximise the flexibility of the staffing resource for clients. Highlighting the disparity in terms of tax benefits between the self-employed and umbrella contractors, ARC chairman Adrian Marlowe notes: “This inequality is unfair and encourages confusion, tax abuse and avoidance schemes. It is clear that a new and refreshing approach is required.” More...
Finance contractor demand enjoys long-term growth
Contractor demand in London’s finance sector benefitted from strong long-term growth in February, despite failing to match up to January’s exceptionally strong start. Morgan McKinley’s February 2016 London Employment Monitor shows that, whilst contractor demand declined by 9% month-on-month, vacancies increased by 8% compared with February 2015. Morgan McKinley Financial Services Operations Director Hakan Enver attributes the increase in opportunities to a sharp rise in demand for asset management professionals: “There is growth and demand in that sector and the UK is in prime position to take advantage of this trend.” More...
Umbrella contractors could lose out on salary sacrifice benefits
Umbrella company contractors could be set to lose out on certain salary sacrifice benefits, after the Government encouraged greater vigilance amongst umbrella providers and other agencies. FT Adviser reports that the Government has warned those operating salary sacrifice arrangements to review them to ensure they are compliant with HMRC. Meanwhile, it is also considering limiting the range of benefits that attract Income Tax and National Insurance (NI) advantages. “This announcement is not a surprise as HMRC has been looking at salary sacrifice with increased interest over the past year,” highlights John Harding, employment tax partner at PwC. More...
HMRC service to benefit from Government investment
Contractors look set to benefit from improved HMRC service as a result of a £71m Government investment. Accountancy Age reports that the cash injection will help fund a seven-day-a-week service by 2017 with extended hours for contractors who are unable to contact HMRC during working hours. Other newly introduced measures include a dedicated phone line and online forum for new businesses and self-employed contractors. “Anything that improves the service that HMRC offers to taxpayers in terms of quality of service can only be a good thing,” notes Geraint Jones, head of private client tax services at Berg Kaprow Lewis (BKL) accountants. More...
Self-employed contractor numbers continue long-term growth
The number of self-employed contractors in the UK continues to rise, as shown by recent figures from the Office for National Statistics (ONS). In the three months leading up to January 2016, the number of self-employed has increased by 106,000, compared with the same period in 2015. “These figures show another rise in the number of people working for themselves, with this part of our economy having a disproportionately positive effect on the total number of people in employment across the UK,” notes IPSE economic advisor Lorence Nye. More...