AS 2015: T&S restrictions go ahead while IR35 remains unchanged
Contractors were relieved to find that no kneejerk measures were taken by HMRC to fix IR35 as the legislation was overlooked in the Autumn Statement 2015, despite rumours that contractors would be forced onto the payroll after engaging with a client for a month. Umbrella company contractors and contractors using personal service companies (PSCs) who are caught by IR35 have been less fortunate, as the ‘blue book’ confirms that they will lose their access to travel and subsistence tax relief. “It represents a betrayal of contractors and places a huge obligation on HMRC to implement a rigorous enforcement strategy,” notes PRISM CEO Crawford Temple. More...
Contractor recognition across Europe at all-time high
Contractor recognition is at an all-time high across Europe, with policymakers now increasingly aware of core contracting issues and the importance of the contingent workforce of Independent Professionals (Ipros). “Ipros in the EU are in a better place than a year ago,” explains Patricia Leighton, Professor of European Social Law at the IPAG Business School. “This is down to the efforts and energies of membership organisations working very hard at many levels to provide evidence and education to policymakers and governments.” However, Leighton warns that there are still challenges to come, namely misperceptions by policymakers that Ipros are ‘fraudulently self-employed’. More...
Umbrella company contractors could lose ongoing expenses tax relief
Umbrella company contractors look set to have restrictions placed on their ability to claim tax relief on travel and subsistence expenses at source from April 2016. This is due to a clause in the March 2015 Finance Act that was inserted and passed by the Houses of Parliament without allowing for a consultation. Consequently, umbrella contractors who are still eligible will have to claim expenses at the end of the tax year via a self-assessment tax return. The clause is being contested by the Freelancer and Contractor Service Association which is pursuing HMRC for maladministration, whilst Lord Palmer of Childs Hill has called for the legislation to be repealed. More...
Contractor prospects boosted by clients looking to benefit from market conditions
Contractors can anticipate a wave of new business as clients look set to capitalise from improving UK market conditions by increasing contingent workforce headcounts. The Recruitment and Employment Confederation’s (REC) November 2015 JobsOutlook shows that 79% of businesses consider economic conditions to be improving. As a result, 43% are looking to increase contingent headcounts in the short-term, with just 1% planning on cutting contractors. Medium-term prospects look similarly promising, whilst demand has also resulted in rising rates. “Skilled people are at a premium and organisations across the economy are having to pay more to attract staff,” highlights REC chief executive Kevin Green. More...
Contractor demand boosted by buoyant finance sector
Contractor demand continued its growth trend during October 2015, due in large part to the buoyant finance sector. The latest Professional Recruitment Trends report from the Association of Professional Staffing Companies (APSCo) shows that contractor demand is up by 2% year-on-year, with vacancies in the finance sector up by 34%. “Contract vacancies are consistently strong, despite a continual increase in permanent roles, as organisations continue to capitalise on the benefits of a flexible workforce,” highlights APSCo Chief Executive Ann Swain, who also notes that finance contractor demand is outstripping availability. More...
Aspiring self-employed contractors deterred by financial fears
Becoming a self-employed contractor is an increasingly tempting prospect for much of the UK population, although many aren’t willing to take the plunge as a result of financial fears, a new study has revealed. A survey by Intouch Accounting has found that almost 40% of respondents would like to start their own business, a figure that rises to more than 50% for under-35s, and 60% for women under the age of 35. However, the lack of guaranteed income appears to be a major stumbling block, with 47% considering it to be the biggest deterrent. More...
Limited company contractors to have their say on employment allowance consultation
Contractors who trade via their own limited company and do not employ any staff have the opportunity to make their views known in the Government consultation seeking comments on recent draft regulations. At the Summer Budget 2015 it was announced that Employment Allowance on NICs would no longer be available to companies where the director is the sole employee, in order to focus the benefits on companies that support employment. This is due to come into effect in April 2016. The consultation will run until 3 January 2016 and contractors can respond via email. More...
Contractor trade body accuses central Government of “appalling complacency”
Contractor trade organisation PRISM has spoken out criticising central Government after it emerged that numerous departments have failed to study the potential impact of anticipated changes to contractor travel and subsistence tax relief. The proposed measures are widely expected to lead to rising contractor rates as contingent staff look to recoup lost earnings. PRISM asked various departments what they had done to assess the impact of the proposed changes, to which every department admitted that no assessment had been carried out. “How can you plan for expenditure if you don’t foresee the most flexible workers expecting significantly more for their time?” highlights PRISM CEO Crawford Temple. More...
Limited company contractor tax breaks to be subject of Labour review
The tax breaks currently offered to limited company contractors and other businesses will be the focus of an in-depth review by the Labour Party, International Business Times reports. Current business reliefs allow firms to adjust how much they owe the taxman, partly as an incentive to go into business. “The big test really is to see whether economic policy is helping or hindering businesses and families. So that’s why we’ve started to look at the different types of incentives to invest business has,” explains Shadow Chief Secretary to the Treasury Seema Malhora. More...
NHS contractor rate cap comes into effect
IT and interim management contractors working for the NHS will soon have limits placed on what rates they can earn, after a controversial cap on NHS staff spending came into effect this week. From April 2016, NHS trusts will not be able to pay contractors more than 55% above the earnings of a permanent member of staff, Staffing Industry Analysts reports. The cap was confirmed within five working days after a consultation into the proposal closed on 13 November. Head of External Relations and Compliance at the Association of Professional Staffing Companies (APSCo) Sam Hurley described the outcome as “a complete sham”. More...