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ContractorCalculator: Contracting news in brief – 08/July/2016

Buy-to-let investors warned against tax avoidance schemes

Contractors with buy-to-let properties have been warned against tax avoidance schemes offered by firms describing them as loopholes. The Telegraph reports that the recent 3% hike on Stamp Duty Land Tax (SDLT) for buy-to-let owners has resulted an “industry of tax avoiders”, with companies selling “tax solutions” that could leave contractors out of pocket. Certain firms claim to be able to legally mitigate SDLT owed for an upfront fee. However, these schemes have been flagged up as tax avoidance by HMRC, which warns those found to be involved will be liable for all of the tax due, plus potential interest. More...

Oil and gas contractors viewed as solution to engineering skills shortage

Oil and gas contractors in search of work are being encouraged to explore opportunities in the wider engineering sector. With EngineeringUK estimating that the economy will need more than 180,000 engineers per year until 2022, the Government has announced the Talent Retention Solution scheme is to be supplemented by an additional website specifically for oil and gas workers. “The future success of our economy depends on having the people with the right skills in the right jobs, and that’s why it’s vital we retain the talents of our highly-skilled workers currently in the oil and gas industry,” highlights UK Business Minister Anna Soubry. More...

Chancellor proposes further corporation tax cuts

Limited company contractors could benefit from further cuts to corporation tax following the vote to leave the EU. Chancellor George Osborne announced the proposal, which would slice 5% off the current rate, in a bid to reinvigorate the UK economy and give Britain a post-Brexit vote boost, the Telegraph reports. “We must focus on the horizon and the journey ahead and make the most of the hand we’ve been dealt,” commented Osborne, who claimed he would wait for official forecasts before formally announcing any new measures. More...

Finance contractors offer solution to CFO woes

Contractors in the finance sector could see heightened demand after a study revealed that more than half of global CFOs are struggling with a talent shortfall in their finance team. Research carried out by accountancy firm EY shows that 52% of CFOs are unable to delegate due to a lack of necessary skills. The problem is particularly acute in the UK and Ireland where 60% of CFOs claim their finance function doesn’t possess the right mix of capabilities to meet the demands of future strategic priorities. Meanwhile, 56% emphasise the need to improve their digital knowledge, leaving the door open for contractors with sufficient skillsets. More...

Second Scottish referendum could compromise oil and gas prospects

North Sea oil and gas contractor prospects could suffer as a result of a proposed second Scottish Independence referendum, Energy Voice reports. Scottish First Minister Nicola Sturgeon put plans for a second referendum back on the table following the Brexit vote. However, experts have warned that the uncertainty caused would be detrimental to the sector. “The recovery underway is slow and all a referendum will do is undermine that further,” notes Colin Welsh of Simmons & Company. “Operators and investors want certainty,” adds Jamie Stark of Burness Paull. “The call for IndyRef 2 will be of little comfort to those looking for a period of calm.” More...

Contract vacancies suffer minor EU referendum setback

Contracting opportunities only appear to have felt a minor sting as a result of uncertainty prior to the EU referendum. Whilst the latest Purchasing Managers’ Indexes (PMIs) from Markit and the Chartered Institute of Purchasing and Supply (CIPS) reveal largely subdued figures, staffing levels in the construction and service sectors continue to rise, whilst manufacturing contractors may be required to help with an increasing workload following headcount cuts within the sector. This month’s PMIs highlight:

  • The UK Manufacturing PMI reveals a modest improvement in the performance of the manufacturing sector just prior to the EU referendum. However, whilst output rose across consumer, intermediate and investment goods industries, staffing levels decreased for the sixth straight month. This may leave the door open to contractors to fill skills gaps, should business continue to improve.
  • Output in the construction sector fell to a seven year low in June, with respondents linking the downturn to uncertainty surrounding the EU referendum. Despite this, the UK Construction PMI shows that staffing levels continued to rise, albeit at a moderated pace. Markit senior economist Tim Moore describes the speed of the downturn as: “A clear warning flag for the wider post-Brexit economic outlook.”
  • Contract opportunities remain in the service sector, despite weakening levels of activity growth in June. The UK Services PMI shows that service providers continued to expand their workforces, despite overall output matching the 38-month low recorded in April. “These subdued figures are a wake-up call to policymakers that fast, decisive action is necessary to prevent further slides in activity,” comments David Noble of CIPS.

Finance contractor demand accelerates prior to EU referendum

Contractors in the finance sector experienced heightened demand for their services in June, with vacancies increasing by 27% year-on-year. The latest Professional Recruitment Trends report from the Association of Professional Staffing Companies (APSCo) attributes the surge to a reluctance from clients to engage in permanent hires amid pre-Brexit uncertainty, combined with added workloads in areas such as legislation and stress-testing. “This is a sector which could arguably be disproportionately affected if the UK exits the single market,” comments APSCo chief executive Ann Swain. “So it seems that interims are being drafted in to cover workload until long-term strategies are in place.” More...

Contracting stakeholders announce Brexit partnership

Contracting trade bodies have joined forces following Britain’s decision to leave the EU, SME Insider reports. The collective, including the Association of Independent Professionals and the Self Employed (IPSE) and the Federation of Small Businesses (FSB), aims to amplify a positive message from UK contractors and small businesses. “Now we are leaving the EU,IPSE believes the priorities should be new global trading arrangements, cutting burdensome regulation on small and micro businesses and ensuring that Britain has the most flexible and attractive economy in the world,” comments IPSE director of policy and external affairs Simon McVicker. More...

Published: 08 July 2016

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