Government projects to be decimated by IR35 reforms
Government projects will be wiped out if proposed public sector IR35 reforms go through. This warning comes after a recent survey by ContractorCalculator found that 80% of contractors would sooner leave the sector than accept an inside-IR35 contract. The survey of over 500 also found that forcing contractors into fixed term employment contracts would actually reduce HMRC’s overall tax take by roughly £115m.
The greatest danger for contractors is the possibility that a private sector rollout will follow. If you’re a contractor there’s still time to raise awareness of the damage that the reforms will cause by sharing these findings and lobbying your local MP. More...
Uber court case could significantly impact your next contract
Uber drivers have taken the company to tribunal in a battle over employment status and employment rights. Contractors need to keep close tabs on the tribunal, which could set a precedent for future cases surrounding IR35.
“The basis upon which the decision is made in this tribunal will carry huge weight in future IR35 cases,” comments ContractorCalculator CEO Dave Chaplin. “Rather than engaging in disputes with HMRC over subjective legislation, contractors could potentially point towards the outcome of this case as confirmation of their self-employed status.” More...
Prime Minister asks contract sector what it wants from Brexit talks
Representatives from the contracting community met with the Prime Minister this week ahead of the UK’s Brexit negotiations. Prior to the roundtable, the Belfast Telegraph reported that Mrs May would stress the importance of the flexible workforce to the UK economy and ask for stakeholder’s views on how the Government can help it seize potential new opportunities.
“I want to build an economy that works for all, and that means working with, and listening to, smaller firms,” commented the PM. “They are a fundamental part of my vision of building a country that works for everyone, not just the privileged few.” More...
NHS bureaucrat on £60,000 a month as HMRC presses on with misguided IR35 reforms
An NHS trust paid a temporary manager £60,000 a month in the midst of the worst financial crisis in its history. An investigation by the Telegraph also highlighted a rise of almost a quarter of health service bureaucrats being paid ‘off payroll’ between 2013/14 and 2014/15.
Whilst raising serious concerns regarding the practices of senior health officials, the findings also call the focus of HMRC’s wider ranging public sector IR35 reforms into further question, after a ContractorCalculator survey found that four in five contractors would sooner leave the public sector than be taxed as an employee. More...
Contractors on hand as Brexit blues hit clients
Contractors are on hand to plug gaps as Brexit uncertainty drags down the latest Purchasing Managers’ Indexes (PMIs) from Markit and the Chartered Institute of Purchasing and Supply (CIPS). Cuts in production mean firms are slashing headcounts, leaving a void for contingent staff to fill once each market recovers. This month’s PMIs highlight:
- Headcount cuts continued in the manufacturing sector as the UK Manufacturing PMI fell to its lowest level since February 2013. Whilst contractors may not see many immediate opportunities, clients may increasingly look to them as a more cost-effective alternative to permanent hires in a volatile market.
- July saw a further decrease in construction, largely off the back of a steep decline in commercial building following Brexit. The UK Construction PMI does however note that demand for housebuilding and infrastructure projects remained resilient, indicating that a recovery, and improved contractor prospects, might not be far away.
- A fall in business activity meant headcounts remained static in the service sector, ending a three-and-a-half year period of employment growth. Despite this, the UK Services PMI notes that service providers expect business activity to rebound over the next 12 months, with contractors also on hand to fill gaps in the meantime.
OTS wants your feedback on proposed approaches to contractor taxation
The Office of Tax Simplification (OTS) wants to hear your feedback on two discussion papers proposing alternative approaches to the taxation of contractors and small businesses, Accountancy Live reports.
The ‘look-through’ approach would see limited company contractors taxed on the company’s income under income tax and capital gains tax (CGT) rules, as opposed to corporation tax. The Sole Enterprise with Protected Asset (SEPA) model aims to extend the protection of limited liability beyond limited company contractors by making provision for the protection of assets of self-employed workers. The OTS wants your views by 12 September 2016. More...
EU referendum has little impact on contractor demand
Market uncertainty caused by the EU referendum appears to have had little impact on contractors’ long-term prospects, as demand for contingent staff levelled out, year-on-year. The latest survey data from the Association of Professional Staffing Companies (APSCo) shows that contractor demand fell by just 0.3% compared with June 2015, with the finance sector enjoying a 26% rise in vacancies.
“It seems that, despite cynicism from various commentators who have hypothesised on the immediate and sustained effect that the UK’s decision to leave the EU will have on hiring sentiment, we are yet to witness any significant impact,” adds APSCo chief executive Ann Swain. More...
‘Brexit noise’ sees construction skills woes overlooked
Concerns over Brexit are distracting the construction industry from the real danger - skills shortages. This is according to Paul Payne, managing director of construction firm One Way, who comments: “We’re as busy now as we were before the referendum and the lack of skilled professionals is being overlooked because of all the noise around Brexit.”
Speaking to Staffing Industry, Payne also notes a substantial rise in the amount of construction workers choosing to operate on a contract basis. Whilst he concedes the flexible arrangement is only a short-term fix for the struggling sector, contractors are well placed to capitalise on intensifying demand. More...