After a leaked letter last week revealed the government’s decision to review how some public sector employees are paid via limited companies, there was a strong response from the contractor and freelance community.
The PCG and IMA were among the first groups to respond, stating the value of contractors in both the public and private sector and defending those genuine contractors who may be caught up in the governments review. Continue reading
A new report from the Federation of Small Businesses (FSB) has revealed how small businesses are struggling to win public sector contracts, despite efforts from the Government over the last year to make more available.
The FSB’s ‘Voice of Small Business’ survey found that 40% of small firms believe the tendering process for public sector contracts is too complex, with a further 37% stating that bigger firms are preferred by public officials, who sideline many SMEs. Continue reading
A number of contractor and industry groups have spoken out about the Government’s use of contractors, following a leaked letter last week. The letter revealed that a treasury official is reviewing pay and tax arrangements for some of the highly paid public sector contractors.
Jason Atkinson, chairman of the Interim Management Association (IMA), backed the government’s review of long term contractors and the wider investigation into tax avoidance. However, talking about the value of contractors and interim managers within both the public and private sector he expressed some caution regarding the review. He said; Continue reading
Following recent high profile cases of tax avoidance within the public sector, a recent leaked letter from Chief Secretary to the Treasury, Danny Alexander, to George Osborne has revealed a review into the use of contractors within Government.
The leaked letter revealed that around 2,000 senior government officials are currently being paid through their own limited companies, rather than being taxed directly through PAYE. After the case of Ed Lester of the Student Loans Company earlier this year, Mr Alexander began the review, and is reported to have said; Continue reading
With the Agency Workers Regulations passing seven months in place, contractor group the PCG have polled their members to assess the impact on the freelance workforce. The REC’s Report on Jobs last month revealed that a slowdown in temporary jobs may have been caused by the AWR, yet the PCG poll suggested otherwise.
Over three quarters (77%) of their respondents stated that the regulations had not affected them at all, which the PCG described as “encouraging”. Of the remaining respondents, 16.3% replied that they had been affected ‘a little’ with 6.7% responding with ‘a lot’. Continue reading
With an official announcement from HMRC over the details of their IR35 ‘Business Entity Tests’ still to come, there has been a wave of speculation online amongst contractors as to how the tests are likely to score them.
The leaked questions and scoring system, featured on contractor sites including Contract Eye, appear to rank contractors over three levels of risk; low, medium and high. Based on the questions suggested, it seems very unlikely that many genuine contractors will pass the tests, which was one of the reasons that the PCG withdrew their support of the system last month. Continue reading
Chancellor George Osborne has announced the introduction of a previously discussed real time information PAYE system. In a letter to Lin Homer, who was appointed as head of HMRC earlier this year, the chancellor described the system as “crucial” to the administration of PAYE.
The changes to the tax system, which were proposed last year, will see HMRC informed of PAYE payments by employers as they are made, as opposed to at the end of the tax year. The pilot scheme is currently being trialled by ten volunteer employees, of which HMRC are one, and if successful could be implemented as part of a universal credit system by October 2013. Continue reading
Last week’s unemployment figures from the Office of National Statistics revealed a fall for the first time in nearly 12 months. The ONS figures saw a drop of 35,000 to 2.65 million for the 3 month period to the end of February, putting the UK unemployment rate at 8.3%.
After some concerns that temporary jobs in particular may be affected by rising regulations, like the AWR, REC Chief Executive Kevin Green said that it is “good news that more people are finding work.” He also called the “continuing trend” of people working part time a good thing, because as well as the advantages of contracting, part time or temporary contracts can also lead to further positions. Continue reading
Further issues have been raised from the year’s budget over a number of tax proposals. With tax legislation such as IR35 receiving considerable exposure, basic problems with the tax system and policy have been raised by tax bodies as well as a Treasury Select Committee.
The budget has been widely criticized for issues such as the ‘pasty tax’, and the recent select committee have found further problems regarding retrospective taxation, which they said “conflicts with the principles of good tax policy laid down by the chancellor.” Continue reading
The PCG’s IR35 Business Entity Test trial has been extended until the end of April after a positive response from the group’s contractor and freelance members. The trial, which has been put together to help support the PCG’s proposal to the IR35 Forum has received over 3000 responses, which the group say is a “superb response”.
Details regarding the Business Entity Tests are due to be released by HMRC within the next few weeks, however the PCG are just one of the members of the IR35 Forum who are unhappy with some of the aspects of the tests. Continue reading
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