Limited company contractors face new HMRC business tests in April
Contractors are facing new business tests from April as HMRC introduces its new risk profiling and IR35 administration regime. HMRC has confirmed its earlier commitment to review contractor’s businesses as a single entity, rather than on a contract by contract basis. This is likely to place a greater emphasis on a limited company contractor’s ‘badges of trade’, such as investing in a website and having multiple clients. HMRC also plans to publish in April 2012 six of the seventeen new contractor scenarios the IR35 Forum has developed. More…
Energy skills shortage will boost contractor demand in the sector
Contractor demand in the UK’s energy sector is likely to receive a boost as increasing skills shortages in the permanent workforce escalate. According to research by recruiter Hays Energy and the Energy Institute, despite enjoying higher pay and benefits than other industries, the UK’s energy sector is failing to attract enough skilled workers, opening opportunities for contractors. “Well qualified and experienced energy professionals are sought after and therefore highly valued,” explains Sarah Beacock, Professional Affairs Director for the Energy Institute. “There is no doubt that there is a shortage of talent in some specialisms of the energy industry.” More…
GAAR targets contractors’ aggressive tax avoidance schemes, says tax expert
Aggressive tax avoidance schemes adopted by contractors are likely to be among the targets of any new General Anti-Avoidance Rule (GAAR). Accountancy firm BDO’s Tax investigations Partner Fiona Fernie told BBC News: “A GAAR is aimed at deterring abusive tax avoidance” and “would act like a blanket legislation to differentiate between what counts as responsible tax planning and what is abusive tax avoidance.” Fernie warns that schemes whose existence is solely for the avoidance of tax would be the focus of any new powers granted to HMRC under the rule. More…
Alternative hiring solutions may reverse AWR-hit limited company contractor demand
There could be a solution in sight for limited company contractors suffering as a result of falling demand caused by clients choosing to hire permanent staff rather than risk Agency Workers Directive (AWR) compliance issues. Elevate’s Dan Collier says alternative hiring solutions must confirm that contractors are not agency workers, and intermediaries are not temporary work agencies. “By supplying a secure brokerage environment in which contractors and clients can be matched and contract directly, there is no temporary work agency involved in the process and the contractor is not an agency worker,” says Collier. “This means AWR certainty and much lower risk for the client.” More…
Some contractors have been forced into employment so clients can escape AWR
Some limited company contractors are being forced to lose their freelance status so that clients can remain largely unaffected by the Agency Workers Regulations (AWR). That is the conclusion of the Association of Recruitment Consultancies (ARC), citing recent research by recruitment giant Adecco. “Evidence suggests that some workers have been forced to lose their freelance status to become employees,” says ARC Chairman Adrian Marlowe. However, the research also shows that 78% of hirers “have not experienced any discernible effect” as a result of AWR. More…
Contractors ‘trapped on a late payment merry-go-round'
Businesses across the country, including contractors running limited companies, are trapped on a late payment merry-go-round as they try to reconcile time spent maintaining a healthy cash flow with fighting the on-going downturn. Those are the conclusions of new research from Bibby Financial Services. A third of UK businesses surveyed reported that they had been forced to accept extended payment terms from customers during the past twelve months. But with the European Late Payment Directive due to come into force on 16th March 2013, contractor clients have just 12 months to clean up their act and get payments under control in line with the new regulations. More…
Contractors may benefit from HMRC administration improvements
Limited company contractors may benefit from a range of measures HMRC plans to introduce to improve its administration of the tax system for small to medium sized enterprises (SMEs), although this is a different initiative to its IR35 administration exercise with the IR35 Forum. In its response to an Office of Tax Simplification (OTS) review of small business taxation, HMRC “will be delivering improvements for small businesses” in areas such as guidance, delivering digital services and “improving the ‘tone’ of the relationship with SMEs”. More…
Contractors can no longer submit paper returns as VAT goes online
All VAT-registered contractor limited companies in the UK will now have to submit their VAT returns online, and pay electronically, for periods starting on or after 1 April 2012. Many contractors will already be filing online, as all newly-registered businesses have had to submit their VAT online, as well as pay electronically, since 1 April 2010. Contractors still submitting paper returns should contact their accountant or HMRC urgently to register for online filing.