Contractors’ travel and subsistence expenses subject to another Treasury review
Contractors are facing another wide-ranging review of their travel and subsistence expenses that could lead to major reductions to tax relief. This would potentially include abolishing tax relief on daily costs, such as lunch expenses when working away from the office. The Treasury are seeking to update existing rules in the Travel and subsistence framework discussion paper, claiming that some are outdated whilst others require simplification. “In a year when we thought that the Government could do no further damage to the contracting sector, we are now faced with the possibility of further tax hikes as expenses tax reliefs are withdrawn,” highlights ContractorCalculator CEO Dave Chaplin. More...
Contractors have short window to take advantage of low long-term mortgage rates
Contractors only have six months left to benefit from record low long-term interest rates before the UK’s interest rates increase due to global macroeconomic events. Recently, Bank of England interest rates have remained near zero, but mortgages expert at CMME Taj King explains a change in forecast is due in 2016: “Before that happens, contractors seeking greater financial stability over the medium term can benefit from record long-term fixed rates of interest that are offering unprecedentedly low rates for five to ten years. But only if they act fast.” More...
Finance and IT contractors could benefit from cautious financial sector
Financial and IT contractors offer a cost-effective solution to companies in the UK’s financial sector who are looking to rein in spending after optimism in the sector flatlined. The CBI/PwC Financial Services Survey for the quarter leading up to September 2015 reports the end of a three-year run of optimism growth, which looks set to result in many businesses erring on the side of caution with regards to investment and hiring activity. Contractor demand may also benefit from a perceived skills shortage, with almost a third of firms considering difficulties sourcing candidates to be a factor contributing to anticipated limitation of growth over the next 12 months. More...
Contractors set to lose significant business from travel and subsistence restrictions
Contractors could be severely affected as a result of proposed changes to travel and subsistence relief expenses and some could even go out of business, according to new research conducted by the Association of Independent Professionals and the Self-Employed (IPSE). The study found that 17% of contractors using limited companies would have to stop taking contracts altogether, while 76% expressed concern that they wouldn’t be able to take on contracts further afield. The vast majority (85%) also claimed they would be forced to charge more for their services, which would deter businesses from hiring contractors, removing crucial flexibility from the UK economy. More...
Contractor travel and subsistence proposals branded unworkable at tax summit
Contractors should continue to benefit from travel and subsistence tax relief, and HMRC’s proposals to restrict it are flawed, concluded experts who gathered at the inaugural Self-Employment Tax Summit in Edinburgh earlier this month. Delegates from various contracting stakeholder groups, including IPSE and the Office of Tax Simplification (OTS), identified a number of key problems including complications with the Supervision, Direction or Control (SDC) test and the broader impact that the proposed changes would have on the economy. Similar conclusions were drawn at a meeting held by the Association of Recruitment Consultancies (ARC) on 23rd September where attendees unanimously agreed that changes to relief would be detrimental to contractors. More...
Dividend Tax changes to remain despite contractor protests
Contractors who signed a petition opposing the Dividend Tax changes due to come into force from April 2016 have been met with a disappointing response. The Government’s response to the petition “Reconsider the new Dividend Tax for small businesses” claims Dividend Tax, which is set to increase contractor tax bills by thousands of pounds each year, is necessary to enable continued cuts to corporation tax. “The Government’s response to this petition clearly shows that it does not truly understand the damage the measure will cause to the UK’s small businesses,” highlights ContractorCalculator CEO Dave Chaplin. The petition runs until 24th February 2016. More...
Contractor organisations welcome Labour pledge
Contractor organisations have cautiously welcomed Jeremy Corbyn’s vow to extend maternity, paternity and sick pay to the contingent workforce. In his speech delivered at the Labour Party Conference, Corbyn acknowledged the risks that contractors face and the need to offer them better protection. “IPSE has been calling for the self-employed to be able to access a form of maternity pay, so it’s great that Labour are backing this,” notes IPSE Director of Policy, Simon Vicker. “Additional support needs to maintain the self-employed’s inherent flexibility, as this is where they can make the greatest contribution to the UK’s economy.” More...
Increase in contractor demand driven by finance sector
Contractor demand across the professional staffing market remained stable in August 2015, with opportunities up by 0.3%, compared with this time last year. This is according to new survey data from the Association of Professional Staffing Companies (APSCo), which attributes much of the marginal increase to a buoyant finance sector, where contractor contract opportunities have risen by 7%. “It is no surprise that businesses continue to draft in contractors with high-level or specialist skill sets that would be difficult to secure on a permanent basis, despite the vitality of the permanent employment market,” concludes Ann Swain, Chief Executive of APSCo. More...
Contractors receive guidance from HMRC for Autumn Statement representations
Contractors wishing to submit a representation ahead of the Autumn Statement can use updated guidance from HMRC to maximise the chances that their views will be heard. Contractors are invited to submit representations by filling out a short survey, in which they are required to outline policy suggestions. It is speculated that the Autumn Statement may be used as a launch pad to propose plans for the future of IR35 and contractor travel and subsistence expenses tax relief, whilst possibly offering clarification over how the Dividend Tax changes will work. All submissions must be sent to the Treasury by 16th October to allow for full consideration in advance of the Autumn Statement on 25th November. More...
HMRC issues response to penalties consultation
HMRC has published its response to the consultation over the future direction of penalties impacting contractors. 92 respondents took part in the consultation, offering varying views on how HMRC can alter its regime to improve compliance and effectiveness, with current methods reportedly generating a lot of appeal traffic. As a result of the consultation, HMRC plans to consider various factors when developing the new penalty regime model. Warnings may potentially be sent out ahead of a penalty, whilst a short period of grace following some filing deadlines will also be considered. The compliance history of the taxpayer or business may also receive consideration. More...