Contractors to pay even more tax as a result of HMRC Dividend Tax clarification
Recent guidance published by HMRC on the Dividend Tax changes has highlighted that the £5,000 Dividend Allowance is actually not an allowance but a zero rate band. Consequently, most contractors will end up paying £1,250 more tax than previously thought, according to the taxman’s Dividend Allowance factsheet. ContractorCalculator CEO Dave Chaplin was quick to highlight that there may still be further changes before the Finance Bill is published next year: “It is important to note that the Dividend Allowance factsheet is only HMRC’s guidance, and not the full and final story.” More...
Contractors increasingly required to fill strategic skills gaps
Contractor clients are sourcing increasing amounts of contractors to provide short-term access to key strategic skills, suggesting those who invest in training to maintain their skills base are likely to win the best contracts. The Recruitment and Employment Confederation’s (REC) JobsOutlook for August 2015 also reports that 79% of contractor clients are taking advantage of contractors due to skills shortages across various sectors, including construction and technical. “The shortage of skilled workers could impact negatively on the UK’s economy, particularly in the services sector that currently accounts for most economic growth,” warns ContractorCalculator CEO Dave Chaplin. More...
Contract opportunities in Scotland on the rise
Contractor prospects in Scotland improved during July 2015, as several sectors enjoyed an increase in demand and overall pay rates, particularly in the financial sector and the UK video games capital of Dundee. This is according to July’s Bank of Scotland Report on Jobs, which also shows a slump in demand for oil and gas contractors in Aberdeen. The gap between supply and demand worsened, with contractor availability numbers declining for the twenty-seventh successive month whilst vacancies increased at their most rapid rate since January 2015. More...
Oil and gas contractors choosing to leave contracting can benefit from MVLs
Oil and gas contractors who are out of contract as a result of falling oil prices and chose to return to employment can mitigate the financial impact by using a Member’s Voluntary Liquidation (MVL) to close down their company. This is according to Mervyn Stanley of Cameron Carnegie, who explains: “An MVL of a solvent limited company enables contractors to close their company and extract any remaining cash using entrepreneur’s relief (ER) that taxes at 10% rather than at their marginal rate. This can provide a welcome financial cushion for contractors whose income drops as a result of leaving contracting.” More...
Contractors mitigating Dividend Tax changes through pensions must act now
Contractors who are starting a pension to mitigate the impact of the Dividend Tax changes, effective from 6 April 2016, should take action now. Angela James of Contractor Wealth, a financial advisor who specialises in contractor financial advice, explains why contractors should seek advice now: “Setting up a pension can take several months, and as tax yearend approaches, the best contractor advisers will be incredibly busy.” James also highlights that contractors can use their 2015/16 tax-free pension contributions allowance if they set up a pension within this tax year, whilst stressing the importance for husband and wife-owned businesses, that will be hardest hit by the changes, to take action. More...
Oil and gas contractor prospects improve as exploration sites offered to firms
Contractors with unconventional skills can look forward to increased opportunities after the Oil & Gas Authority (OGA) announced 27 more locations in England where fracking licences will be offered, including areas in the Midlands and North East. “As part of our long-term plan to build a more resilient economy, create jobs and deliver secure energy supplies, we continue to back our onshore oil and gas industry,” notes UK Energy Minister Lord Bourne. A second group of 132 further locations could also be granted following a consultation. More...
Finance contractors enjoy continued demand due to skills shortages
Contractors in the accounting & finance sector can look forward to improved prospects, according to the Q2 Market Insight 2015 from Badenoch & Clark. The report notes that a shortage of quality candidates is the biggest issue facing clients recruiting in 2015, with 52% of respondents expecting to encounter an issue. Consequently, more than one in four clients expect to draft in contractors to fill the gap, temporarily filling permanent vacancies with contractors because there are simply not enough permanent candidates available. More...
Contractors aged over 50 grow in numbers
The number of contractors aged 50 and over has surged over the past few years, show recent figures provided by the Office for National Statistics, commissioned by the Association of Independent Professionals and the Self-Employed (IPSE). The study found that there has been a 46.5% increase in contractors over 50 since 2008, with this age group now accounting for 72% of all self-employed people. More...
Contractors banking overseas warned over tax regulations
Contractors who are banking overseas are running out of time to comply with international tax regulations as governments step up their efforts to clamp down on offenders. This is according to international contractor management specialists CXC Global, who warn that contractors could be at risk of paying a substantial penalty. Dozens of countries are set to exchange tax information by 2017, increasing the levels of transparency and exposing offenders in the process. Commercial compliance manager at CXC Global Jon Clarke warns: “[Contractors attempting to ‘stay under the radar’] are likely to be on the receiving end of a heavy fine or other more serious sanctions.” More...
Contractors invited to contribute to consultation opposing IR35 regulations
Contractors who are also members of the Association of Independent Professionals and the Self Employed (IPSE) are being encouraged by the organisation to participate in a survey opposing IR35 measures. It is claimed that the uncertainty inherent in IR35 deters companies from employing contractors, hampering economic growth in the process. IPSE has developed a proposal for a ‘Freelancer Limited Company’ (FLC), an optional corporate form which it claims provides clarity over employment status whilst removing contractors from the burden of IR35. Contractors can provide feedback here. More...