Supreme Court ruling sends warning to contractors using ‘IR35 friendly’ contracts
The Supreme Court ruling on the Autoclenz v Belcher case sends a stark warning to contractors using ‘IR35 friendly’ contracts as their only line of defence against an IR35 status inspection by HMRC. Despite having a written contract for services which included a substitution clause and dealt with mutuality of obligation (MOO), 20 car valeters were found by the court to be employees of Autoclenz and not contractors. In overturning the appeal by Autoclenz, Judge Lord Clarke said that the original Employment Tribunal was right to dismiss the contracts as “the documents did not reflect the true agreement between the parties”. More…
Contractors face retrospective taxation by HMRC as BN66 appeal is rejected
Contractors who participated in offshore tax schemes offered by Isle of Man-based Montpelier Tax Consultants are facing potentially huge claims from HMRC for back taxes following an appeal court ruling. Contractor Robert Huitson’s appeal to have the retrospective taxation, known as ‘BN66’, declared unlawful under human rights legislation was unanimously rejected by the appeal court judges. BN66 is intended to close a tax loophole allowing UK residents to receive their income from the Isle of Man, reducing tax liability using double taxation treaties. More…
IT contractors see surge in demand from retailers seeking to diversify
IT contractors have experienced a surge in demand from the retail sector, with firms investing in e-commerce technologies as they seek to diversify, according to Computer People’s latest IT Monitor. Demand in other sectors, such as finance and media, has levelled off as projects are postponed until after the summer. However, this is against a backdrop of increasing overall demand for IT contractors. The report highlights that the contract market is becoming increasingly contractor-candidate led, as a dwindling pool of contractors is soaked up by an increasing number of contract vacancies. More…
Interim management contractor demand dominated by the financial sector
The demand for interim management contractors in the first quarter of 2011 was dominated by the financial sector, reports the Interim Management Association’s latest Market Audit. It shows that in the first quarter of 2011 36% of all private sector assignments came from banking and finance clients. IT & telecommunications clients were in second place, accounting for 12% of assignments. However, the total number of assignments reported by the survey’s contributors fell by nearly 6% compared to the last quarter of 2010. More…
Recruiter body warns HMRC ‘pay day tax relief’ attack will hit umbrella contractors
Umbrella company contractors may be the subject of a sustained HMRC campaign against allowing expenses for temporary workers, says recruiter body the Association of Recruitment Consultancies (ARC). According to Ben Grover, ARC’s external policy adviser, HMRC’s actions could even reduce client demand for contractors: “Any move by HMRC to treat employers of temps differently could drive demand for higher wages to compensate, and may make temp workers less attractive to engage.” More…
Contractor accountants less satisfied with HMRC than small businesses
Contractor accountants and agents have indicated that they are less satisfied with their experience of HMRC’s services compared to small businesses and individuals. HMRC’s Customer Experience score measures four dimensions of a customer’s experience: ease of understanding, ease of completing the process, ease of getting in touch and a service designed with needs in mind. The score for agents, which includes contractor accountants, is 67.8 compared to 78.7 for small to medium sized enterprises (SMEs). More…
IT contractors can help revolutionise front line public service delivery
IT contractors have a key role to play in the Confederation of British Industry’s (CBI) proposals to revolutionise the use of IT in the UK’s public sector. The CBI report, System Reset: transforming public services through IT, urges government to learn the lessons of successful IT project implementation from the private sector. The report claims that many causes of IT problems have been known for more than a decade but the lessons are still not always applied. More…
Contractors should not relax credit controls because company failures are falling
Contractors should not let credit checking and control standards lapse just because the number of companies going into administration is falling. Data from Baker Tilly Restructuring and Recovery shows that the number of businesses going into administration is at its lowest level since the fourth quarter of 2007, before the financial crisis. Rather than become insolvent, many firms are choosing to restructure. However, administration would not protect contractors from clients or agencies defaulting on unpaid debts. More…
Changing employee priorities may drive more workers into contracting
A shift in UK employee priorities away from job satisfaction and towards pay and benefits could result in more workers choosing contracting as a solution to rising living costs. A survey by the Chartered Institute of Personnel and Development (CIPD) shows that 54% of those surveyed want to change jobs to increase salary and benefits. Only 42% of employees want to change jobs primarily for job satisfaction, a reversal of lasts year’s survey findings. Contracting can offer workers both increased pay and benefits and improved job satisfaction. More…