ContractorCalculator: Contracting news in brief - 10/Feb/2012

Contractor demand rises strongly, but billings decline suggests skills mismatches

Contractor demand rose again in January at the strongest rate in eight months, but billings by contractor agencies fell marginally for the second month running. This data, from the latest Recruitment and Employment Confederation (REC)/KPMG Report on Jobs, suggests that clients have assignments that need filling but contractors with the right skills in the right locations are unavailable. The core contracting discipline of engineering is leading the demand league table, with IT remaining in fifth place despite a small monthly increase. More…

Faltering online contractor demand across Europe and in the UK in January

In contrast to the positive Report on Jobs data, online demand for contractors faltered in January, falling by 8.5% in the UK and 6.6% across Europe. The Monster Employment Index Europe for January, which includes the headline index for the UK, shows that even the previously bullish core contracting disciplines of IT, engineering and construction fell by 4.8%, 8.1% and 6.1%respectively. Monster Europe’s Alan Townsend blames the wider economic malaise for the falling demand: “As the challenging economic conditions continue, the Index confirms the trend of recent months ... as employers maintain a cautious approach to hiring.” More…

Financial IT contractors see City hiring increase, despite “cautious hiring market”

Financial IT contractor prospects look set to improve as hiring has increased in London’s financial sector, one of the UK’s largest consumers of IT contractor services. The Morgan McKinley London Employment Monitor shows a 64% increase in City hiring in January, compared to December 2011. However, the number of financial sector vacancies in January 2012 is 52% lower than January 2011, suggesting the sector is far from fully recovered. McKinley’s Chief Operating Officer Andrew Evans explains: “Despite the welcome monthly uplift, this 52% drop on the number of jobs in January 11 indicates we are still in a very cautious hiring market.” More…

Contractors can be cautiously optimistic as service sector shows “record improvement”

Service sector contractors could find the contract market heating up following a surge in confidence and hiring in the UK’s services sector. According to January’s Markit/Chartered Institute of Purchasing and Supply (CIPS) UK Services Purchasing Managers’ Index (PMI), the rise in employment was the “strongest for just under four years” and the “single largest monthly improvement in business optimism” in the survey’s history. An upbeat CIPS CEO David Noble says: “A record improvement in the degree of optimism and the highest increase of employment in nearly four years represents a tentative vote of confidence for the year ahead.”

Positive news for contractors with manufacturing and export-led clients

Contractors with clients in the manufacturing and export sectors received a boost at the end of 2011. December’s UK Trade figures and Index of Production published by the Office for National Statistics reveal that manufacturing output rose by 2.1%, compared to December 2010. The UK’s balance of trade deficit has shrunk to the smallest level since April 2003 as a result of increased exports of goods and services. The UK’s services trade surplus was running at more than £6bn in November and December 2011, and this output includes contractors’ who sell their services to overseas clients. More…

The contracting sector should be wary of attacking its own, says Chaplin

Highlighting “a potent mix threatening contractors’ livelihoods”, ContractorCalculator CEO Dave Chaplin has warned contractors and contracting suppliers to be wary of joining the current witch hunt, in which cabinet ministers and the media are attacking limited company contractors and interims working in the public sector. He says: “This may well come back to bite genuine limited company contractors in the bum – in the form of rushed, poorly considered and unjustified anti-avoidance legislation.” More…

Contractors closing their companies face a tight ESC C16 deadline

Contractors seeking to close their company tax efficiently under the old rules of ESC C16 still have until 1 March to secure permission from HMRC and distribute the cash and assets of their company. The timing is very tight, but according to Abbott Moore LLP’s James Abbott, HMRC is still processing applications allowing contractors to take cash from their closing company as capital before the new £25,000 cap comes into force. Contractors should consult their accountant to determine the most tax efficient option, and do so without delay as the deadline is rapidly approaching. More…

Construction contractors the target of new HMRC “tax cheats” campaign

Construction contractors working in the UK home improvement sector are one of the targets in a new “tax cheats” campaign just launched by HMRC. Alongside trades people, HMRC will target taxpayers who buy and sell goods direct and those failing to complete tax returns. HMRC plans to use new technology to search the internet for information about potential targets. Marian Wilson, of HMRC’s Risk and Intelligence unit, explains: “Using new technology, we have been able to analyse returns to HMRC covering a range of taxes and to cross-reference these with other information to build a picture of where we believe we have taxpayers with missing returns.”

Published: Thursday, February 9, 2012

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