Contractor umbrellas face heavy SDC compliance burden
Umbrella companies looking to continue processing contractor travel and subsistence (T&S) expenses face a heavy compliance burden. HMRC guidance offers little clarity as to what will be deemed sufficient evidence to prove that ‘supervision, direction or control’ (SDC) doesn’t exist within a contract. This will likely result in firms carrying out excessive administration to guarantee compliance. “Umbrellas are expected to continually check on their contractors’ status, although how frequently they do so is up to them,” explains former HMRC tax investigator Robert Burton. “It will ultimately depend on how risk-averse they are and how much certainty they want.” More...
Tax attack could force contractors out of public sector
Public sector contractors could soon be forced to increase their rates or leave the sector altogether. If proposed IR35 reforms are implemented, it will add to a raft of measures that are driving up tax and reducing net income for public sector contractors. “We will either see contractors increase their rates to counteract the additional tax, or we will see an exodus from the public sector,” warns ContractorCalculator CEO Dave Chaplin. Freelancer and Contractor Service Association CEO Julia Kermode also warns overseas opportunities are becoming a more attractive proposition for contractors, potentially compounding skills shortages, adding: “The lure of international working should not be underestimated.” More...
Supervision, direction or control still widely misunderstood
ContractorCalculator has moved to clarify rules surrounding ‘supervision, direction or control’ (SDC) after media reports claimed that umbrella clients are being encouraged to class contractors as ‘unsupervised’ to allow them to continue claiming travel and subsistence (T&S) tax relief. “Many assume that the existence of the right of supervision to any extent means a contractor is subject to SDC,” notes ContractorCalculator CEO Dave Chaplin. “HMRC is more concerned about SDC applying 'as to the manner' in which the contractor carries out their work. Supervision is fine, provided there isn’t detailed instruction about how to exactly carry out the task.” More...
Queen’s Award win puts online contractor accounting in the spotlight
Online contractor accountancy firm inniAccounts has been named as the winner of the Queen’s Award for Enterprise in Innovation, marking a huge step towards bringing online contractor accounting into the mainstream. Online accounting software is increasingly becoming the favoured solution amongst contractors. For inniAccounts co-founder James Poyser, developments within this field are key to ensuring contractors can maintain their independence: “By using an online accountancy service, contractors can get the insight they need to make informed financial decisions, but without the burden of becoming an expert on tax.” More...
North Sea contract opportunities to be reinforced at conference
Opportunities for contractors and firms within the North Sea offshore industry will be considered at Oil and Gas UK’s annual conference. ‘Open for business’ will run from 14 to 15 June at Aberdeen Exhibition and Conference Centre, where attendees will debate exploration and innovation within the sector. “Billions of barrels of oil and gas have yet to be recovered from the North Sea and these prospects, together with the world-class supply chain, an improved cost base and a much more competitive tax regime, make the UK Continental Shelf a really attractive province,” highlights Oil & Gas UK chief executive Deirdre Michie. More...
IT contractor demand to rise as firms struggle to source overseas talent
IT contractor demand may benefit from complications with legislation concerning immigration rules. Computer Weekly reports that fresh changes to the ‘Statement of changes in immigration rules’ identify cyber-security specialists as an occupation that Tier 2 work permits can be obtained for, making it unnecessary to advertise roles in the EU for 28 days before hiring outside. However, becoming a ‘qualifying company’ in order to secure workers on a Tier 2 work permit poses numerous other complications for smaller companies, including the requirement to register with the Home Office as a sponsor. Subsequently, IT contractors may see rising demand from firms who don’t qualify. More...
Contractors to lose thousands each year in event of Brexit
Contractors will be thousands of pounds worse off each year if Britain decides to leave the European Union (EU). This is according to analysis by the Treasury which has determined that a Brexit would cost each UK household £4,300 a year on average. It also concludes that the negative impact on the economy would lead to a £36bn reduction in tax receipts, equivalent to an approximate 8p increase in the basic rate of income tax. Inevitably, economic output is also likely to suffer, with the Treasury estimating that the UK is between 4.6% and 7.8% of GDP better off inside the EU. More...
Contractor numbers continue long-term growth trend
UK self-employed contractor numbers continue to show long-term growth, as the latest Office for National Statistics (ONS) figures show. In the three months leading up to February, the number of self-employed increased by 120,000, compared with the same period in 2015. This means there are now 4.64m self-employed people in the UK. “The rise in self-employment has been consistent for a number of years and represents a structural shift in the labour market,” notes Lorence Nye, economist at the Association of Independent Professionals and the Self Employed (IPSE). “It is vital that Government introduces measures that support people who work for themselves.” More...
HMRC updates IR35 guidance for intermediaries
HMRC has published updates to its reporting requirements guidance for contractor intermediaries, following efforts to make requirements less burdensome. Intermediaries are required to report to HMRC every three months via an online service, providing details for each contractor they engage with for whom they don’t operate Pay As You Earn (PAYE) income tax. Penalties have been introduced for sending a late report. These are dependent on the number of offences in a 12-month period. £250 is charged for a first offence, £500 for a second offence, and £1,000 for third and later offences. More...
Construction contractors key to achieving Government target
Construction contractors will play a key role in ensuring the Government meets its housebuilding target. Figures from the Office for National Statistics (ONS) show that housebuilding output increased by 6.8% in the three months leading up to February 2016 – the largest increase in 23 months. However, chairman of Hudson Contract David Jackson notes that housebuilding will need to further accelerate for the Government to reach its target of one million new homes by 2020, adding: “Their [the construction contractor workforce’s] ability to remain flexible will be crucial in helping the Government achieve its ambitious infrastructure targets.” More...