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.

Stuart Davis, Chairman of the Freelancer and Contractor Services Association (FCSA), has echoed the thoughts of these groups in a further statement. He stated how there is nothing wrong engaging with contractors at any level, including the civil service, providing correct taxes are paid, and continued;

“We would like to remind the Government and those who are criticising these employment arrangements, that freelance contracting work is undertaken by thousands of workers up and down the UK and is a legitimate and valuable way of working that benefits both employers and contractors.”

Mr Davis spoke of the many traits of contractors, in particular their flexibility, saying; “It is this flexible movement of people to go where and when their expertise is needed that boosts the competitive elements of the UK economy, which are recognised as necessary for recovery and growth.”

ICS are one of the leading contractor accountants and administration companies and have helped thousands of contractors working in a range of industry sectors. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.

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.

With more than 2,700 FSB members surveyed it was surprising to see that whilst one in seven firms had bid for public sector contracts, 41% of them had failed to secure any businesses. Referring to the Governments Contracts Finder website launched last year, only 27% of SMEs said they found it useful whilst 55% said they instead relied on personal contacts or referrals for public sector work.

Further findings from the survey were that 38% of small businesses believe that the government and public sector should actively use SMEs or encourage their use where possible. The FSB are using the result of this survey to call on the government to support small firms, with their Chairman, John Walker, commenting;

“The Government has made an effort to raise awareness in the public sector that Britain’s entrepreneurs and small businesses are willing and able business partners. But clearly more must be done. While central government has raised its game, without a true culture change across the public sector as a whole the Government’s initiatives will have little impact.”

ICS are one of the leading contractor accountants and administration companies and have helped thousands of contractors working in a range of industry sectors. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.

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;

“Danny Alexander’s letter would suggest they are at risk of throwing the baby out with the bath water.  By applying this review to all senior interim executives, the Government could lose the ability to quickly deploy highly skilled interim managers, on short-term contracts to deliver specific results immediately and effectively, which is often critical in the public sector.”

The PCG also spoke about the leaked letter and government review, cautioning them not to “destabilise and discourage the vast majority of talented, tax-paying freelancers in their search for a rogue minority.”

In a statement on their website, MD John Brazier said, “Disguised employment and tax evasion should be investigated and stopped; but genuine freelance contractors should not be penalised in the rush to ‘do something’. Genuine contractors contribute greatly to the economy, providing value for money to the taxpayer, and essential skills and services to the public sector.”

He continued; “Amidst this debate we should reflect on the number of government departments which rely on the flexibility and skills of freelancers with a specific talent that can be used where and, importantly, when they are needed.”

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.

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;

“The sheer scale of off-payroll engagements across government, and the length and size of these contracts, suggests that the scope for artificial tax minimisation may be greater than previously understood.”

The findings of the review are expected to be published later this month, with stricter rules expected to be brought in. Whilst examples of contractors earning over £58,200 a year are thought to have been considered so far, not all highly paid contracts will be covered in any future measures.

Mr Alexander continued by saying that “[he doesn't believe] it would be proportionate to ban all such contracts in future”, and called for better assessment by individual government departments, who should try to ensure that highly paid specialist staff are meeting their income tax and NIC obligations.

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.

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’.

Given some of early worries regarding the AWR, these figures are particularly calming for both contractors and recruiters, and the PCG believe that agencies and clients are becoming more aware of the scope of the regulations.

The REC also hosted an AWR webinar this week to gather feedback from both employers and workers on their approach to the regulations. They too hosted a poll to measure how much of an impact the AWR has had on demand for agency staff.

The results of their poll were similar to the PCG’s with 86% of their members saying they had experienced little or no impact, and 15% reporting a significant impact. However, the REC also discovered that 40% of the members questioned said that workers were not aware of the regulations, and 51% said that workers were aware but were simply ‘getting on with things.’

Both the REC and PCG have worked hard to ensure that recruiters, employers and contractors are aware of the implications of the AWR, and future webinars and talks will help to further inform people.

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.

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.

Kate Cottrell, who is a member of the IR35 Forum, has suggested that these new tests will effectively run as a pilot for the next 12 months, which could see more IR35 investigations in order to test the system.

Although an official announcement was expected by the end of April, a revised date of May 7^th has now been given. The PCG’s own business tests trial finished last week and the results of this should also be revealed soon. ICS will monitor both announcements in order to provide a comprehensive review of the ongoing IR35 situation.

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.

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.

This is another measure towards improving tax collecting operations, and Mr Osborne said he hopes that it will help collect an additional £17 billion in tax revenue. Exchequer Secretary David Gauke, spoke about the launch of the RTI, saying; “RTI will ensure that the PAYE system meets the needs of the 21st century. It will improve the service to taxpayers by making it easier to ensure that people pay the right tax after a change of job.”

Stephen Banyard of HMRC, also spoke about the pilot trial, which he claimed “will allow us to iron out any wrinkles in a small, controlled environment so that we can ensure RTI is working smoothly as more and more employers join the pilot. We are working closely with employers and the payroll industry but having HMRC take part in the pilot will allow us to see first-hand how it is working from an employer’s perspective.”

And after recent criticisms of the tax system from leading taxation bodies, the chancellor and HMRC will hope that this trial runs successfully, both to help the image and operations of the UK tax system.

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.

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.

However although there was a fall in unemployment, further ONS figures released today have found that the UK has fallen back into recession, with the economy shrinking 0.2% in the first three months of 2012 and 0.3% at the end of 2011.

Despite this the REC have reported that their recent JobsOutlook has recorded employer confidence at the highest level since they began their survey in March 2009. Some of the highlights of the report included the fact the a third (34%) of employers plan to increase their number of agency workers in the next quarter, and just under half (44%) said that would keep numbers the same. Long term plans varied slightly, with 29% confirming they would increase agency staff and 55% remaining the same over the next year.

REC Director of Research, Roger Tweedy, described these figures as “really positive”. On the point that employer confidence had reached a record high, Mr Tweedy said that “it will be important to track whether increasing employer confidence is a continuing trend or whether it’s peaking.”

ICS are one of the leading contractor accountants and administration companies and have helped thousands of contractors working in a range of industry sectors. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.

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.”

The committee’s report claimed they had “serious reservations” about the issue of retrospection in the tax system, a concern shared by the Association of Chartered Certified Accountants. The ACCA’s head of taxation said that the group would welcome a consultation regarding retrospective tax policy changes, as well as updates on the impact of the 5p cut in the top rate of tax.

The current UK tax system has also been attacked by the head of leading tax body, the Chartered Institute of Taxation. In a speech to the CIOT Cambridge Conference earlier this month, Anthony Thomas criticized politicians and other senior officials for their “ill-informed, ill-conceived, ill-thought out, and often deliberately misleading” comments.

Mr. Thomas called for greater clarity over high profile tax issues, especially regarding tax evasion and avoidance. He said; “Statements which deliberately confuse tax evasion with tax avoidance do nothing to improve understanding of the way in which our tax system functions. When will politicians and senior revenue officials state clearly that tax evasion is illegal, tax avoidance is not?”

In what he described as a “dysfunctional tax system creaking at the seams” he also said “there needs to be greater simplicity and clarity so people understand how much tax they should be paying and why.”

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.

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.

The PCG have an alternative scoring system for the tests to the one proposed by HMRC and the forum, and so they are aiming to use the results of their own trial tests to measure how well the current scoring system will or will not work, and to help shape their own proposed policy.

Following the great response they have had so far, the PCG have decided to continue the trial until April 30^th, after which they will be able to provide a full update. This should also be in line with a further expected announcement from HMRC. The trial test is available to PCG members on their website for the next week.

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.