Off-payroll rules backfire: UK contractors replaced by non-EU workers paying less tax
Contractor Calculator has obtained damning evidence from former Student Loan Company contractors and freedom of information requests showing that the year-old off-payroll rules have forced contractors out of contract, replacing them with non-EU workers on intercompany transfers (ICT) paying less tax. “We warned in February 2012 that any legislation enacted to tackle public sector off-payroll arrangements would be inappropriate, poorly considered, rushed and unjustified,” notes ContractorCalculator CEO Dave Chaplin. “Not only has this turned out to be the case, but the botched rules have resulted in contractors losing work and the government is also receiving less tax.” More...
Politicians need to “wake up” to contracting, PCG tells Lib Dem conference
Contractor issues and the ‘rise of the independent workforce’ were championed to key politicians and policy makers at a PCG-led debate at the Lib Dem conference in Glasgow. Panel members included employment relations minister Jo Swinson, the Recruitment and Employment Confederation’s (REC) Tom Hadley and Nora Senior from the British Chambers of Commerce (BCC). PCG’s Simon McVicker highlighted that: “Policymakers across Europe, not just in the UK, need to wake up and recognise the benefits of freelancing and flexible working”. More...
Contractors treated unfairly by government and policymakers, says PCG chairman
Contractors are treated unfairly by government and policymakers, when compared to the UK’s larger businesses. PCG chairman Julie Stewart highlights this contrast by using the ‘zero hour’ contracts issue as an example: “It seems because this impact will be felt by the largest businesses rather than the smallest, policymakers are treading very carefully”. However, when rules impacting on small businesses have been introduced, Stewart notes that: “This care was sorely needed, and nowhere to be seen, when IR35 was introduced and the Public Sector rules came into effect.” More...
Contractors using partnerships face crackdown on tax avoidance
Contractors trading via partnerships are facing a crackdown on how existing partnership rules can be used to avoid tax. AccountancyAge’s Calum Fuller writes that the “government is determined to put a stop to the current rules, which allow junior employees to be classified as a partner for tax purposes” and “aims to tackle the manipulation of profit and loss to create a tax advantage”. However, experts are concerned that the measures could do more harm than good, and that the pre-legislation consultation provided insufficient detail on how the proposal would operate. More...
Contractors offering cloud computing skills can fill skills gaps
Contractors with the skills to architect, deploy, build and manage cloud computing solutions will find their services in much greater demand as skills shortages develop over the next two years. This is according to a report in Computing by Danny Palmer, which highlights that the demand spike is driven in part by barriers to cloud computing reducing faster than originally predicted. There will be a “five million people shortage worldwide in the next 10 years in this space,” cloud expert Bobby Soni told Computing. More...
Contractor and company tax advisers get away scot-free, claims Hodge
Accountants and tax advisers who create and promote tax avoidance schemes for companies and contractors are “getting away scot free” and should face a “crackdown” on their activities. This is according to Public Accounts Committee chairman Margaret Hodge speaking on a BBC Panorama programme ‘Tax lies and videotape’, and reported by Economia’s Raymond Doherty. During the same programme, HMRC adviser David Heaton was filmed offering tips on how to keep money “out of the Chancellor’s grubby mitts”. Heaton subsequently resigned from his HMRC role. More...
NHS trusts warned over locum doctor contractor tax avoidance schemes
NHS trusts hiring locum doctor contractors have been warned by chief secretary to the Treasury Danny Alexander about using tax avoidance schemes. From 1 April 2009, when the VAT Staff Hire Concession was withdrawn, NHS trusts have been forced to pay VAT on top of the fees they pay to recruiters when hiring locum doctors and other healthcare contractors. Various schemes have been created so that NHS trusts can save the VAT. AccountingWeb’s Nick Huber reports that Trusts have been warned that in future they must employ locums on short-term contracts or pay VAT to agencies. More...
Limited company construction contractors receive new guidance on CIS claims
Construction sector contractors trading via a limited company can use a new Construction Industry Scheme (CIS) checklist provided by HMRC to help when claiming back CIS deductions. The CIS requires that deductions are taken from payments to labour-only subcontractors, and this can include contractor limited companies as well as sole traders and partnerships. The checklist helps contractors ensure that they reclaim any deductions via their regular Pay As You Earn (PAYE) reconciliation. More...
More service provider choice for contractors as Liquid Friday joins Freelancer and Contractor Services Association
Contractors seeking umbrella and payroll service providers that have achieved compliance requirements now have greater choice, as Liquid Friday joins the Freelancer and Contractor Services Association. “With the industry under ever-increasing scrutiny, there has never been a better time to be part of an organisation dedicated to maintaining high standards,” notes Liquid Friday managing director Phillip Venn.
Contractors running out of time to have their say about HMRC’s RTI initiative
Today is the last day that contractors can make their views known to HMRC about its real time initiative (RTI) for Pay As You Earn (PAYE) income tax and National Insurance Contributions (NIC). According to HMRC, it will “use the information to help assess the impact of these reporting changes and to tell [HMRC] more about whether any changes are needed to the new reporting rules”. The survey should only take about 10 minutes. More...