Contractor body calls for best practice guidance for public sector clients
Contractor membership organisation PCG has called for the creation of ‘Best Practice’ guidance for public sector clients seeking to use contractors. The guidance is badly needed to avoid what PCG CEO Chris Bryce calls “examples of malpractice”. PCG has written to Chief Secretary to the Treasury Danny Alexander offering its assistance to draw up the guidance. More...
Direct contractor and PCG action defuses Ministry of Justice contract dispute
Contractor and PCG action in response to new unreasonable contract terms being forced on contractors at the Ministry of Justice has led master vendor Capita to back down. As reported by ContractorCalculator, PCG had responded to the imposition of the new Contingent Labour 1 contract by contacting Crown Commercial Service chairman Bill Crothers, and sources confirmed that contractors also wrote to Capita explaining why they could not sign. ContractorCalculator has learned that contractors can continue to work on existing contracts and that the new contract will be amended to accommodate their concerns.
Contractor demand and rates forecast to increase, as skills shortages bite
Contractor demand is forecast to increase over the next 12 months, reports the latest Recruitment and Employment Confederation (REC) JobsOutlook for March 2014. It also highlights that rates increased sharply in the first quarter of 2014 and skills shortages in core contracting disciplines are worsening. According to the report, agencies are predicting a particular shortage of contractor candidates for “the front-line skills within the service sector and those [skills] required to build/rebuild organisations’ own infrastructure.” In practical terms, this is translating into a shortage of IT contractors and interims at the professional/managerial level. More...
Contractors should be wary of offshore solutions following new HMRC guidance
Contractors should be cautious if considering using offshore employment intermediaries following the publication of new guidance by HMRC. The guidance is to support the new Offshore Intermediaries Legislation, which comes into force on 6 April 2014. The legislation is designed to tackle schemes that avoid paying class 1 National Insurance Contributions (NICs). Oil and gas contractors in particular are believed to be users of such schemes and may find their offshore scheme promoters caught by the legislation. The guidance explains who will be responsible for paying unpaid NICs, and that could ultimately be the client. More...
The next major source of onshore and offshore oil and gas contracts could be Spain
Oil and gas contractors could be turning to Spain for the next source of lucrative, long-term oil and gas contracts. A report by the Guardian’s Stephen Burgen writes of a Spanish “energy gold rush”. Major offshore oil and gas finds in the Atlantic and Western Mediterranean, and extensive shale deposits, could generate 250,000 new contracts and jobs in the country by 2065, and many of these would be offshore. North Sea contractors in particular would be prized for their offshore expertise. More...
Self-employed to outnumber public sector workers by 2018
The number of self-employed workers, including some contractors and freelancers, is predicted to outnumber the public sector workforce by 2018. This forecast by the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) and Etsy.com would potentially represent a huge shift of influence in favour of the freelance and self-employed workforce, and a resulting impact on policymakers. The report confirms that: “Self-employed and micro-businesses [will] emerge as key electoral group.” More...
Contractor and recruiter bodies call for HMRC action over “Elective Deduction Models”
The Freelancer and Contractor Services Association, alongside the Recruitment and Employment Confederation (REC) and Association of Professional Staffing Agencies (APSCo), are calling for HMRC to review so-called ‘Elective Deduction Models’. These models are “being promoted as a method of classifying workers as self-employed for employment law purposes but employed for tax purposes”. The models mean workers lose rights under National Minimum Wage (NMW), Agency Workers Regulations (AWR) and pension auto-enrolment legislation, but still pay employment taxes. This could hit umbrella contractors particularly hard.
Contractors continue to benefit from strong economic growth
Contractors continue to benefit from the strong economic growth shown by the Confederation of British Industry’s (CBI) Growth Indicator for March 2014. Although growth slowed from historic highs during February, it “remains strong and well above average”. The service sector, which includes most contracting businesses, is forecast to perform strongly over the next quarter. “As this year progresses, we expect further increases in business and consumer confidence. Productivity and earnings should also start to recover,” notes Anna Leach, CBI’s head of economic analysis. More...
Clarity for contractor tax advisers as the Mehjoo ruling is overturned
Contractor tax advisers have greater clarity over professional negligence claims and have confirmation that contractors are responsible for their own tax affairs following a High Court ruling overturning the Mehjoo decision. According to a report by AccountancyAge’s Calum Fuller, businessman Hossein Mehjoo had successfully sued his tax advisers for failing to advise that he used a tax avoidance scheme and refer him to other specialists. The decision by the Court of Appeal said that the original verdict “was wrong” to find the original accountants were in breach of duty. More...
Contractor tax team set to lose 300 staff by 2015
HMRC’s specialist tax team, which targets high earners, including contractors, with complex tax affairs, is set to lose up to 300 staff by 2015. Rajeev Syal reports in the Guardian that a leaked memo from HMRC’s director of specialist tax Mark Aiston that “showed that HM Revenue & Customs is to lose up to 300 staff this year” from its specialist tax team and that “those who remain will be asked to deliver more revenue with less resources”. It seems likely that the taxman’s already overburdened resources will be further stretched, which may reduce further the likelihood of contractors being investigated by HMRC. More...