Government releases public sector IR35 consultation
Limited company contractors working in the public sector will have their IR35 and employment status determined by their client or agency, a new Government consultation has confirmed. ‘Off-payroll working in the public sector: reform of the intermediaries legislation’ proposes a framework whereby contractors deemed to be within IR35 will have income tax and National Insurance Contributions (NICs) deducted at source via Pay As You Earn (PAYE) by their engager. HMRC also reaffirms its plans to develop an online tool to help determine a contractor’s status and notes that it “will be bound by the outcome of the test”. More...
Contracting experts warn IR35 public sector changes are ‘a done deal’
HMRC’s latest IR35 consultation shows that the public sector changes are “a done deal” in the Governments eyes, contracting stakeholders have warned. “From day one it has seemed that the Government fully intended to press ahead with these plans, despite all of the warnings,” comments ContractorCalculator CEO Dave Chaplin. Seb Maley of IR35 consultants Qdos Consulting warns that a private sector roll-out is likely to follow: “It seems quite clear that this is HMRC’s intention for the private sector. Contractors in general need to read and understand this consultation now because it could affect them in the very near future.” More...
Contractors face tougher lending conditions for buy-to-let mortgages
Contractors applying for buy-to-let mortgage deals are set to face tougher lending conditions as lenders begin adopting the recommendations of a recent Bank of England Prudential Regulation Authority (PRA) consultation. This is according to CMME mortgages expert Taj Kang who warns that affordability tests will become tougher whilst lenders will also introduce ‘stress’ tests. The consultation also proposes that contractors with four or more properties become classed as portfolio landlords, and face even more stringent stress checks. “The consultation’s proposals are just that – proposals and not legislation. But some lenders have already made changes to stay ahead of the market,” Kang adds. More...
Finance sector continues to drive marginal rise in overall contractor demand
Contractor demand continues its trend of marginal long-term growth as recent figures from the Association of Professional Staffing Companies (APSCo) show that overall contract vacancies are up by 1%, year-on-year. This is largely down to the buoyant finance sector where contractor vacancies have risen by 29%, an acceleration attributed to increases in workload in the run up to the 2015/16 financial year-end. “Freelancers contributed £109bn to the UK economy in 2015 and this trend for flexible working shows no sign of abating,” comments APSCo chief executive Ann Swain. “The professional staffing sector is working with employers to respond to this shifting recruitment landscape.” More...
IT contractors don’t feel Government support
The majority of contractors working in IT or project management don’t feel that the Government is offering them sufficient support, new research has found. Only 17% of contractors responding to a survey carried out by accountancy and umbrella firm The Pulse Umbrella Group agree that the Government is on their side, following legislative changes in April that have served to reduce contractors’ take-home pay. “The Government seems to be more interested in adding red tape and reducing the financial incentives to become a contractor, rather than encouraging this flexible and often highly skilled part of the UK workforce,” comments The Pulse Umbrella Group CEO Chris Futcher. More...
Contractors unable to pay tax following HMRC blunder
Limited company contractors are amongst those who have been unable to pay millions in tax following another blunder from the taxman. Tens of millions of pounds in VAT and corporation tax are yet to be paid after HMRC changed its bank details without telling businesses. The Telegraph reports that tax payments from a number of businesses have bounced as a result and are yet to be collected. Contractors who pay tax using IBAN are likely to have been affected, with many receiving late payment penalty notices despite being none the wiser as to how they should pay. More...
Brexit places UK in danger of skills crisis, study warns
Contractor demand would be significantly impacted if Britain were to leave the EU, with a skills crisis likely to follow. This is the warning from a report from global resourcing solutions provider BPS World which highlights construction, engineering and IT as three sectors where UK firms have become increasingly reliant on overseas talent within the EU. The UK currently sources more than 2 million workers from other EU nations, allowing it to thrive despite ongoing skills shortages. “A vote to leave would exacerbate a skills crisis in the UK that has been ignored for too long,” comments BPS World founder Simon Connington. More...
Contracting sector hampered by late invoice payments
Contractors continue to suffer as a result of late invoice payments, with a new study finding that contractors and freelancers are owed an average of £5,431 in late payments. Response Source cites the research from fintech start-up Ormsby Street which shows that whilst 19% of respondents report that most of their invoices are paid on time, contractors have to wait for an average of 18 days after their due date to receive payment. “For a freelancer to be owed more than £5,000 is clearly unacceptable and threatens the emerging freelance economy in the UK,” notes Ormsby Street managing director Martin Campbell. More...
Buy-to-let landlord numbers rise to 1.75m
The amount of contractors investing in buy-to-let properties has seen a marked increase over recent years. New figures based on HMRC data reveal that 1.75m people declared income from property during the 2013/14 tax year, a 7% increase on the previous year. The Guardian notes that these figures are likely to have risen further more recently as a result of the buy-to-let boom caused by cheap mortgages and rising rents. Recent changes to stamp duty land tax (SDLT) are expected to curtail the growth, although the surge in borrowing by landlords prior to the tax hikes indicates that property remains popular. More...
French contract market continues to up-skill
The number of skilled contractors in the French temporary employment market is on the rise, reports Staffing Industry Analysts. The latest data from Prism’Emploi, the French association of employment agencies, shows that temporary employment in France grew by 5.9% in March, compared with the same month last year. Notably, the rate of growth in the number of skilled workers accelerated to 9.6%, whilst the number of temporary middle managers and professionals has also risen by 7.7%. Sector-by-sector, construction featured prominently as it enjoyed a 7.1% rise in contractor demand, followed by trade at 6.5% and services at 5.3%. More...