Leaked guidance pressures public sector contractors to quit
Contractors working in the public sector and earning over £219 a day and/or on contracts of six months or longer will be under pressure to quit if new government guidance is implemented. In a letter to accounting officers and CEOs of government departments, which was leaked to PCG, the Director General Finance & Commercial Group of the Department for Business, Innovation and Skills(BIS) says contractors must use HMRC’s notoriously unreliable Employment Status Indicator (ESI) to prove their contracting status. Contractors failing the test may be forced to implement IR35, or be forced out of their contract. More...
Contracting grows by 12%, contributing £100bn to UK economy, reveals new PCG research
Contractors and freelancers contribute an estimated £100bn to the UK economy, with the contracting sector having grown by 12% since 2008 to reach 1.56m contracting and freelance workers. Flexible workers such as contractors and freelancers now account for 5-6% of the UK’s workforce. Commissioned by PCG and authored by John Kitching and David Smallbone of Kingston University’s Small Business Research Centre, the report will help provide contractors and freelancers, and their representative bodies, with a powerful tool for engaging with policymakers at a national and European levels. More...
Engineering and technical contractor demand forecast to decrease
Demand for engineering and technical contractors is forecast to decrease over the next 4-12 months according to the latest Recruitment and Employment Confederation (REC) JobsOutlook. Overall, a third of clients plan to increase their contractor workforce slightly in the next 3-12 months, mainly in sectors such as industrial, technology, professional/managerial, accounting and finance and office professionals. The survey also reports that the impact of the Agency Workers Regulations (AWR) has been to reduce the overall number of contracts and level of agency work.
Professional jobs market “restarts what could be bounce back from bottom”
Permanent IT, finance and accounting roles have started to recover from the slump, with demand increasing by 19% between May and June, shows the latest Association of Professional Staffing Companies’ (APSCo) Monthly Trend Report. This surge in permanent hires will indirectly benefit contractors, as APSCo chief executive Ann Swain explains: “The UK’s professional recruitment market is a crucial barometer for the performance of the UK’s broader economy, so good news here is good news for the wider economy.” More...
Two-thirds of contractor clients believe employment regulation is a threat
Contractor clients are hiring fewer contractors as a result of employment regulations. Facing the Future,the Confederation of British Industry (CBI)/Harvey Nash Employment Trends Survey, reports that six months after the implementation of the Agency Workers Regulations (AWR), almost half of contractor clients (46%) have been affected by the new rules. Many clients (57%) have been forced to cut down on their use of agency workers, while 8% have stopped using them altogether. The regulations are having a detrimental impact on contract opportunities, with 12% of firms reducing contractor headcount, and 17% preferring to increase overtime for existing staff rather than use contractors. More...
Contractor demand increases across manufacturing sector
Contractor demand has increased in the UK manufacturing sector in the three months to July, the eighth consecutive month that headcounts have risen. The Confederation of British Industry (CBI) quarterly Industrial Trends Survey highlights that production also increased over the period. “Despite a further escalation in the eurozone crisis, this survey shows some resilience in the UK manufacturing sector, with sentiment about the general economic situation broadly stable,” comments CBI’s head of economic analysis Anna Leach. More...
Recruiters exploiting contractor expenses in £22bn tax avoidance scam
Contractors are being exploited by recruitment agencies running “travel and subsistence” expenses schemes supposedly outlawed by HMRC last year. The Telegraph’s Louisa Peacock writes that contractor agencies “identify a certain amount of the worker’s weekly pay as expenses, and then claim tax relief on those expenses from HMRC”, without passing on the benefits to their contractors. The REC’s chief executive Kevin Green told Peacock that “HMRC was applying its own guidelines differently across the industry, leaving agencies confused over what was right and wrong.” More...
Tax relief for North Sea gas production could create 4,000 new contracts and jobs
Oil and gas contractors can look forward to a stream of new contracts following the Treasury’s decision to offer tax relief on near-shore gas field exploitation on the UK Continental Shelf (UKCS). According to industry body Oil & Gas UK: “the measure should trigger the development of specific gas projects involving expenditure of £2.4 billion, the creation of 4,000 British jobs and £600 million of additional tax revenues for the public purse.”
Contractors using aggressive tax avoidance schemes could be named
Contractors using aggressive tax avoidance schemes may be named by the scheme’s promoters, if proposals by HMRC make it into law. In its new consultation, Lifting the Lid on Tax Avoidance Schemes, HMRC is seeking to expand the range of schemes that must be disclosed under the Disclosure of Tax Avoidance Schemes (DOTAS) legislation. The taxman is suggesting that it may force finance companies to name individuals using their schemes. More...