Revealed: the true cost of ending limited company contracting in the public sector
Government abolition of limited company contractors would cost it up to 20% more per worker and force key talent out of the public sector. ContractorCalculator CEO Dave Chaplin, a masters-level mathematician who has ‘run the numbers’ to reveal the true cost of what he calls the government’s witch-hunt of limited company contractors, warns: “The government looks set to sleepwalk the public sector into a financial and skills crisis that could rip through the Chancellor’s forthcoming Budget predictions and wreak havoc on the professionalism of the civil service.” More…
IR35 administration: contractors need ‘substantive progress’, says OTS final report
Contractors need to see “substantive progress” made on improvements to the administration of IR35, according to the Office of Tax Simplification (OTS) in its final report on HMRC administration. Referring to the IR35 Forum, the OTS says: “...we understand that changes may be introduced from April 2012, which will be welcome.” It is not stated by OTS, but it is reasonable to expect any changes will be announced in the 2012 Budget on 21 March 2012. OTS’s report on HMRC administration is one of three final reports that call for simpler income tax, disincorporation relief and simplified reporting requirements for the UK’s smallest businesses. More…
Umbrella contractor rates fall and the gender pay gap continues to widen
The average hourly rate for umbrella contractors has fallen in the last 12 months, and the gender pay gap between male and female contractors also continues to grow, according to research by umbrella services provider Parasol. In 2011 the gender gap was £3,225 a year, which has grown to £4,459 a year in 2012, based on an average hourly rate for men of £33.09 compared to £30.56 for women. The average hourly rate for umbrella contractors in February 2012 is £32.39 compared to £33.12 in February 2011. Contractor and freelancer rates are at the mercy of the current economic conditions and the usual suspects of the global downturn and uncertainty in the eurozone [are] having an impact,” says Parasol Group Managing Director Derek Kelly. More…
Permanent roles account for nearly three quarters of IT jobs being advertised
Permanent roles prevail in the IT recruitment sector. According to data from specialist recruiter The IT Job Board’s Salary Monitor, 74% of assignments advertised are for permanent roles. The jobsite monitor not surprisingly shows that the highest paid permanent positions in IT are usually reserved for CIOs, but there are non-management jobs commanding high salaries: one of the highest paid jobs currently being advertised is for an architect based in East Anglia at a salary of £80,000. On the contract side, it is for a C++ IT professional, earning £550 per day. And IT Job Board’s managing director Alexandra Farrell says: “…we would expect to see contract roles continuing to rise.” More…
Contractor rates unlikely to increase in first half of 2012 says recruiter
Contractors are unlikely to see much in the way of rate increases in the first half of 2012. According to IT recruiter ReThink Recruitment, although 59% of UK IT directors expect salaries for IT staff to rise in the year ahead. In addition, 93% of IT directors surveyed said that they expected contractor rates to either stay the same or fall in the year ahead. ReThink director Michael Bennett explains: “Contractors have had as tough a recession as permanent staff, with some contractors in some specific sectors such as banking being subject to cuts in their contract rates. Unless contractors have very specific, in demand skills or experience, they can expect the first half of 2012 to continue to see little or no increase in contract rates.”
Contractors gain short term from a weakening service sector
Contractors are likely to gain in the short term from a weakening service sector, as firms choose to hire flexible, low-risk workers during times of uncertainty. The February Confederation of British Industries’ (CBI) Quarterly Service Sector Survey shows that business conditions have weakened in the UK’s service sector. CBI economist Ian McCafferty explains that there may be signs that the sector’s contraction is slowing. “Firms providing business and professional services have seen business activity deteriorate, but not to the extent they had anticipated.”
Contractors warned over revealing sensitive client data on LinkedIn profiles
Contractors should be careful what they reveal about their clients on LinkedIn profiles, as highlighted by a recent constructive dismissal case reported by Lawspeed. According to Lawspeed, HR executive John Flexman “handed in his resignation in June 2011, following a disciplinary hearing in which he was accused of ‘inappropriate use of social media’”. His employer, BG Group, “claimed that the [LinkedIn] CV contained confidential information” and that ticking the LinkedIn box to register an interest in ‘career opportunities’ was banned under company policy. Although contractors are not employees, clearly the message is that revealing sensitive information online could lead to legal action by clients. More…
Manufacturing contractors benefit from a second month of hiring increases
Contractors working for manufacturing sector clients have benefited from a second month of hiring increases. The Markit/Chartered Institute of Purchasing and Supply (CIPS) UK Manufacturing Purchasing Managers’ Index (PMI) for February showed that the UK’s manufacturing sector continued to grow in February, with increased demand from the USA and Asia offsetting falling eurozone domestic orders. Companies of all sizes increased hiring during the month.
‘Wealth creators’ call for 50p tax rate abolition
High earning contractors paying the top rate of tax may be in for a tax windfall in the 2012 Budget if the latest calls to abolish the 50p tax rate are taken on board by Chancellor George Osborne. More than 500 entrepreneurs and business leaders have written a letter to the Daily Telegraph calling for the 50p rate to be scrapped, claiming that it is damaging the UK economy. The authors include a significant number of the UK’s ‘mittelstand’ medium sized privately owned companies, which represent a growing contractor market. “Repealing the 50p tax would demonstrate the Chancellor’s wish to celebrate British entrepreneurialism, stimulate industry and contribute to the Government’s growth agenda,” the letter says. More…
Oil and gas contractor demand buoyed by a few headline projects, not sustainable growth
Oil and gas contractor demand in the North Sea is being buoyed by a few “headline grabbing” projects and not by ongoing medium to long-term projects. This is according to the latest 2012 Activity Survey from Oil & Gas UK, which claims that the “medium to long term prospects…are being frustrated by the structure and instability of the current fiscal regime”. Oil & Gas UK’s chief executive Malcolm Webb highlights the record drop in 2011 production as evidence that the Chancellor’s tax grab in the 2011 Budget seriously damaged the sector’s, and oil and gas contractors’, prospects.