Contractors with significant company savings need to act fast to make tax savings
Contractors with large cash reserves in their limited companies don’t have long left to distribute savings tax-efficiently through a Members Voluntary Liquidation (MVL). Currently, contractors can extract cash from their companies paying as little as 10% tax with an MVL. However, due to concerns over the use of the scheme by ‘phoenixing contractors’, HMRC announced a new Targeted Anti-Avoidance Rule (TAAR) in a December 2015 Policy Paper due in force from April 2016. “HMRC’s concern is that limited company contractors will see MVL’s as a loophole to minimise tax liabilities,” explains Mike Simister, director at insolvency practitioners Lines Henry. More...
Finance and IT contract sectors to recover from festive blip
Finance and IT contractor prospects look encouraging going into 2016, after a disappointing end to last year. Morgan McKinley’s London Employment Monitor for December 2015 revealed contractor demand suffered a 33% month-on-month decline over Christmas. However, the Confederation of British Industry (CBI)/PwC Financial Services Survey – December 2015 highlights increasing confidence within the sector. This is due in large part to rising business growth in areas such as life insurance and investment management, which could prove useful sources of contracts. Meanwhile, IT contractor demand also looks set to benefit from a 54% anticipated rise in IT investment within the finance sector. More...
Self-employed contractor numbers continue to rise
Self-employed contractor numbers in the UK continues its long-term growth trend, as confirmed by the Office for National Statistics (ONS) figures, which show a 98,000 increase in the number of self-employed contractors and freelancers in the three months to November 2015, compared with a year before. For economic policy adviser at the Association of Independent Professionals and the Self Employed (IPSE) Lorence Nye, these figures highlight the integral part contractor’s play in the economy: “We hope the Government will continue to implement tailored policies to help this essential sector to flourish to allow for the UK to retain its competitive advantage.” More...
Contractor clients urged to oppose contractor T&S restrictions
Contracting stakeholders are encouraging contractor clients to take part in an online survey on the impact that restrictions on travel and subsistence expenses relief will have on UK plc. An estimated 750,000 contractors will be affected by the changes, losing at least £3,500 per annum as a result. HMRC expects contractor clients to make up for this deficit by paying higher rates to contractors, but stakeholders argue that the Treasury has underestimated the additional financial burden it is imposing. The results will form the basis of a case to be presented to Government before 3 February 2016. The survey runs until 29 January 2016. More...
Contractors could benefit from skills shortages in Ireland
Contractor availability in Ireland suffered a sharp decline at the end of last year, with Morgan McKinley’s December 2015 Irish Employment Monitor reporting a 21% reduction in applicants, month-on-month. For Morgan McKinley Ireland inward investment director Tracy Keevans, the statistics are indicative that the economy is entering a period of skills shortages: “Professional services firms attempting to hire senior level professionals face stiff competition.” This suggests that finance and IT contractors may want to explore opportunities, with risk professionals earmarked as being in particularly high demand. More...
Contractor digital accounts to be debated in Parliament
HMRC’s proposal to introduce quarterly digital tax returns for contractors and other self-employed workers will be subject to a Parliamentary debate on 25 January 2016, AccountancyAge reports. This comes after an online petition opposing the Government’s plans reached 100,000 signatures. The proposed regime has been heavily contested, with accountants arguing that it will prove to be overly-burdensome and costly for contractors, despite HMRC’s insistence that the requirements will not be equivalent to submitting four tax returns a year. More...
Contractors have APN decisions reversed
Approximately 2,000 contractors perceived to be involved in a tax avoidance scheme by HMRC have had accelerated payment notice (APN) decisions reversed, reports Economia. HMRC has conceded that APNs issued to contractors involved in Montpelier IR 35 Manx Partnership arrangements should not have been as the scheme wasn’t included in the disclosure of tax avoidance (DOTAS) regime. According to the APN regime, HMRC can demand tax it believes it’s owed before the dispute is settled in court. Contractors have 90 days to pay the sum and have no means of contesting the demand until after it is paid. More...
Contractor agencies warned over digital tax requirements for overseas contractors
Contractor agencies have been warned that HMRC expects contractors on overseas fixed-term assignments to be accounted for when upcoming quarterly online tax returns come into effect. “If you place a contractor who is subject to UK tax on a fixed-term assignment outside the UK and they remain a UK tax resident for that contract period, that placement must be included on your list,” explains Mike Phillips, marketing director of ItsInternational. Under the Onshore Intermediaries reporting requirements regulations, agencies are obliged to submit records of contractors who aren’t paid via PAYE. More...
Oil and gas contractors to benefit from skills shortage caused by industry ‘brain drain’
Oil and gas contractors who hold their nerve could benefit as a result of increasing skills shortages caused by widespread redundancies across the industry. Hays 2016 Oil & Gas Global Salary Guide highlights that 32% of respondents report to have been made redundant, 72% of whom are considering work outside of oil and gas, paving the way for potential contract opportunities. Whilst firms continue to slash headcounts in order to stay afloat, Hays Oil & Gas managing director John Faraguna highlights concerns over the long-term repercussions for the sector: “Headcount losses and the resulting potential brain drain to the industry could lead to more acute future skills shortages.” More...
Construction figures highlight importance of contractors within sector
The importance of contractors to the construction industry has been reinforced after figures revealed UK output is suffering due to skills shortages. The Global Recruiter highlights ONS statistics which show industry output in November 2015 declined by 0.5%, month-on-month. As well as stepping in to plug skills gaps, contractors are well placed to help the sector manage fluctuating demand, as chair of IPSE’s Construction Policy Advisory Committee David Jackson points out: “Much of the UK economy’s future success depends on a buoyant construction industry. If it weren’t for the availability of highly skilled self-employed workers, many projects simply wouldn’t get off the ground.” More...