HMRC warns contractors against schemes claimed to get around new disguised remuneration rules
HMRC has promised to challenge schemes that are being marketed to contractors as a way of getting around new disguised remuneration rules. The schemes mentioned in HMRC’s ‘Spotlight 12’ have arrangements that “may involve payments passing through a series of companies, loans from a third party or an offshore alleged employer, a deed of covenant, secondments from one employer company to another or claims of self employment, etc”. HMRC says that it will not only challenge such schemes, but will also target users of them to recover unpaid tax and National Insurance. More...
IR35 should be suspended, says new Liberal Democrat policy paper
“Suspend IR35” is one of the calls in a new paper to be debated at the Liberal Democrats’ autumn conference in September. The paper, written by a working group headed by Julian Huppert MP, calls for “the suspension of IR35 in order to gather more data on permanent abolition”. It notes that IR35 “has not served the needs or the interests of IT contractors” and says “the taxation system must evolve to support modern working practices, rather than discouraging small businesses”. Titled ‘Preparing the Ground: Stimulating Growth in the Digital Economy’, the document also calls for the stranglehold of large IT providers on public sector projects to be loosened, so that smaller firms can bid for contracts. More [PDF]...
Hays reveals pay of 3000 RBS contractors; RBS says some will be ‘let go’
The remuneration details of about 3000 contractors working for the Royal Bank of Scotland (RBS) were mistakenly emailed to 800 of those contractors by their recruitment agency, Hays. A source told Sky News City Editor Mark Kleinman, who first revealed the Hays gaffe, that some of the contractors are on rates as high as £2000 a day. According to Recruiter, an RBS spokesperson confirmed that some of affected contractors are to be included in future headcount reduction. The information sent as an email attachment included roles and pay rates, but not bank account details or national insurance numbers. According to a later Bloomberg report, the email was despatched on Monday 22 August 2011. More...
PCG condemns Unite union’s attack on contractors
PCG Deputy Chairman James Collings has hit out at the Unite union for “trying to discredit, demean and degrade the freelance community”. His strong reaction was a response to a national officer of Unite, who in response to the Hays leak of RBS contractors’ remuneration reportedly said: “Unite has serious concerns about the widespread use of highly-paid staff on short-term contracts at a time when RBS continues to cut large numbers of staff.” Collings noted: “This attack displays a fundamental lack of understanding of the business relationship between contractors and their clients; contractors are not clients ‘staff’ at all, receive none of the benefits given to employees, and indeed have to provide those benefits for their own staff.” More...
Almost 2/3 of new IT vacancies in June were in London and the Southeast
London and the southeast accounted for 40.3% and 23.9% respectively of new IT jobs created in June, according to an analysis of over 10,000 IT job vacancies by ReThink Recruitment. The divide between London and the Southeast and the rest of the UK may be due to the number of private-sector businesses there. ReThink points out that the UK regions outside London and the South East have a heavy reliance on the public sector to create IT jobs, and this could be a major factor in explaining their loss of IT job market share.
‘Robin Hood’ Tobin tax could damage a key market for contractors
The financial sector in the UK and the rest of Europe, which is a key market for IT and many other contractors, could be badly affected if the Tobin tax proposal put forward by German Chancellor Angela Merkel and French President Nicolas Sarkozy were to be implemented. Sometimes referred to as a ‘Robin Hood tax’, the Tobin tax would impose a tax on every financial transaction. In Accountancy Age, Ben Jones of Eversheds' tax group sums up the concerns of many commentators, warning that it could force businesses “to move ... to financial centres outside of the scope of such tax". Naturally, were their financial operations to move from Europe to the US and Asia, contracting opportunities would move with them. More...
Should contractors consider moving surplus profits into gold?
With gold having this week briefly risen above the $1,900 an ounce mark for the first time ever, followed by a dramatic tumble, ContractorCalculator has offered on overview of issues contractors should consider before placing surplus profits in gold. Also discussed are the investment options available, how to actually invest, and the tax implications. For contractors with the right risk profile, gold may offer a profitable option for surplus cash in their company. It could be a good alternative investment, particularly in light of low bank interest rates, volatile stock markets, and the generally gloomy global economic outlook. But contractors are strongly advised to take expert financial and investment advice before taking any action. More...
New jobs in oil and gas sector, despite “fragile” confidence
Despite the latest UK Oil & Gas business confidence index highlighting that the outlook of the upstream oil and gas sector remained fragile in the second quarter of 2011, there has been some good news on jobs. Norway-based Aker Solutions is to create 500 new UK positions; and where there are new jobs, contracts often follow. The firm’s managing director, Alan Brunnen, says: "We anticipate that workload levels will remain high ... [and] we want to be well placed to capitalise on future opportunities.” 300 staff will be added to Aker’s Aberdeen operation and 200 to its London engineering office. More...
Manufacturing sector shows some confidence, but risks remain
Contractors serving the manufacturing sector have been offered some good news, with UK manufacturers “reporting healthy order books and expectations for output growth ... above their long-run average”. The Confederation of British Industry’s latest survey of 510 manufacturers also showed there to be some confidence that growth in factory output over the coming quarter will “pick up a little”. However, the CBI’s Richard Woolhouse warns that “the risks to manufacturing activity and business confidence have if anything increased, due to market volatility and the recalibration of growth expectations worldwide. Concerns around growth in the US and the Euro area present further challenges to the manufacturing recovery.” More...
70% rise in pay over three years for some IT roles, particularly where there is a crossover with marketing
Pay for some senior digital and social media specialists has risen by almost 70% in just three years, according to ReThink Recruitment. Social media and search-based roles are attracting ever-greater rates, particularly for people with five or more years of experience. Most demand is currently coming from the financial services and retail sectors. Mark Geraghty, Head of ReThink Executive, says: “Web based companies and corporates are having to compete ... with the digital marketing agencies who want to hire those individuals out as consultants. That is all driving up their price. But when you consider the amount they can earn in consultancy fees and the budgets that they are now dealing with, the increase ... is not unreasonable.” Clearly, these are potentially profitable target areas for contractors.