Contractors drive innovation and jobs growth: PCG report
Contractors “not only play a significant role in developing innovation, [but] their work also creates permanent jobs”. That’s according to a new PCG report, The Role of Freelancers in the 21st Century British Economy, researched and written by Professor Andrew Burke of the Cranfield School of Management. Launched on National Freelancers Day, the report interviewed executives from 23 major contractor clients who, according to PCG managing director John Brazier, “say that the agility, ability and flexibility of freelancers is ensuring the nation generates the maximum economic value from innovation.”
Increased contractor use is planned by a third of firms
A third of firms surveyed for the latest JobsOutlook report by the Recruitment and Employment Confederation (REC) confirmed they plan to increase contractor hiring over the next three months. The report also noted that an increasing number of contractors are choosing the ‘temp to perm’ route. “October saw a boost in the number of temporary staff who were subsequently taken on as permanent employees, with almost one in four temps landing a permanent role this way, the highest transfer rate since the survey began in July 2009,” says REC.
Media and entertainment contractors facing new employment tests from April 2013
Contractors with clients in the media and entertainment sector may be facing a new employment test from April 2013. In response to criticism by Parliament’s Public Accounts Committee of its contractor and freelancer hiring procedures, the BBC is developing a new employment test, in association with HMRC, which it plans to apply to all of its limited company contractors in on-air roles from next April. More...
Tax avoidance is not illegal, confirms National Audit Office
Contractors seeking to reduce their tax liabilities by using tax avoidance schemes are not breaking the law, confirms central government auditor the National Audit Office (NAO). In Tax avoidance: tackling marketed avoidance schemes, NAO confirms: “It is inherently difficult to stop tax avoidance as it is not illegal.” It lament’s HMRC’s inability to tackle known schemes, as the taxman has a backlog of 41,000 avoidance cases, and NAO claims that there is “no evidence that their usage is reducing”. More...
Higher earning contractors may face limits on pension contributions
Higher and top rate taxpaying contractors may be facing limits to their pension contributions and loss of tax relief, potentially costing them tens of thousands of pounds a year. According to a report by Robert Winnett and Tim Ross in The Daily Telegraph, the plans have been mooted during discussions between senior Conservative and Liberal Democrat MPs, with the LibDems pushing for higher taxes on the wealthy as the price for supporting welfare reform. More...
Contractors needs are not being considered in key government initiatives
Contractors’ circumstances are being excluded from the development of HMRC’s Pay As You Earn (PAYE) Real Time Information (RTI) initiative and the Department of Work and Pension’s (DWP) universal credit plans. This is according to the Chartered Institute of Taxation’s Low Incomes tax Reform Group (LITRG), which is concerned that the needs of self-employed and small businesses, including contractors, are not being taken into account. “We want both universal credit and RTI to succeed,” explains LITRG chairman Anthony Thomas. “Yet both HMRC and DWP, in their rush to get the systems ready for the majority, are seemingly in total denial about the very substantial problems facing a very significant minority.”
Contractors won’t suffer if income tax and National Insurance are merged, claims report
Contractors won’t lose out if income tax and National Insurance Contributions (NICs) are merged; in fact, “the self-employed and other groups will receive a tax cut.” These are the conclusions of a new report by the 2020 Tax Commission, a joint project between the Institute of Directors (IoD) and the Taxpayers’ Alliance, which provides a roadmap of how NICs can be abolished by 2017. An accompanying survey of IoD members shows that 79% of businesses want income tax and NICs to be merged.
Contractors gain access to larger online assignments market
Contractors can now access an online assignments marketplace with 6.6m users and 4m completed projects, following Freelancer.com’s acquisition of vWorker. The combined marketplace provides clients with access to contractors and freelancers in 600 skills categories. vWorker originally focused on programming and IT-based work, then in 2010 expanded to include a wider selection of work categories. More...
Contractor clients’ directors and executives target of HMRC campaign
The directors and senior executives of some of the contracting sector’s largest clients are the target of a new HMRC campaign of investigations into tax underpayment. Law firm Pinsent Masons reports that, “HMRC’s Large Business Service is investigating directors and senior executives for £400m worth of underpaid taxes – including [Pay As You Earn (PAYE) income tax], and National Insurance Contributions.” Pinsent Masons partner Jason Collins says: “HMRC has taken a particular interest in cases where income on an individual’s role at a company has been structured to reduce their tax burden.” More...