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Temporary workers: The application of Tax, National insurance and National minimum wage legislation

Posted by Redego | Posted in Agency, News | Posted on 25-03-2010

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In the last two years HM Revenue and Customs (HMRC) have seen a growth in arrangements which are variously described as ‘Travel and Subsistence Schemes’ or ‘Mobile Worker Schemes’. These schemes are operated by many businesses involved in the supply of temporary workers to end users: Employment Businesses and umbrella companies.

MP wants a blacklist of IT contractors

Posted by Redego | Posted in News | Posted on 05-11-2009

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A blacklist of public sector IT contractors should be drawn up to identify those whose past pledges of value for money were just spin, a Labour MP is urging.

Tougher scrutiny for home loans

Posted by Redego | Posted in News | Posted on 20-10-2009

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Borrowers face a mortgage affordability test from lenders amid plans by the Financial Services Authority (FSA) to step up the regulation of home loans.
Self-certification mortgages will be banned under the proposals with lenders required to verify borrowers’ incomes.
FSA chief executive Hector Sants said that some people who were able to get home loans in the boom would no longer be able to under the proposed rules.
The industry will have until 30 January 2010 to comment on the plans.
The FSA, in its mortgage market review, has outlined a series of proposals for increasing regulation in the mortgage market.

Borrowers face a mortgage affordability test from lenders amid plans by the Financial Services Authority (FSA) to step up the regulation of home loans.

£10,000 free life cover for new parents!

Posted by Redego | Posted in Articles | Posted on 08-10-2009

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As a Contractor, you may not have replaced your lost ‘death in service’ benefits that you used to benefit from as a ‘permi’. But when you become a parent the safety net that this cover provides becomes vital to protect your children if the worst should happen.
With this in mind, we can now offer life cover worth £10,000 absolutely free to new parents.
The joy of becoming a parent is often accompanied by an overwhelming feeling of responsibility for your new born. You begin to consider how you will create a safe home environment for your baby and how you will protect it if anything should happen to you. It’s easy to forget the importance of life cover when you get caught up in the excitement of a new baby, but with free cover for new parents it need not be a financial burden. The award winning protection advisers at ContractorFinancials can help you to arrange the cover without any hassle so you have more time to enjoy the important things.
How does the cover work?
Life cover offers an essential safety net to Contractors because if you die then it will pay out a lump sum or an agreed income to cover your families expenses and pay off any debts. At an already traumatic time, life cover offers the peace of mind for your dependents that they are protected financially and prevents them from being liable for any debts you leave behind.
You can insure yourself for a certain period in your life, for example until your children leave home, or you can choose a whole of life policy that will pay out no matter how old you are when you die. The insurance can be inflation proofed to ensure that the amount paid out upon death will be worth the same amount in spending terms as when you decided to take out the policy. This is particularly important for a whole of life policy as £100,000 now would hold a very different value in 30 years time.
The offer of £10,000 free life cover applies to new parents and as such you need to register for the cover before your baby is six months old. The offer applies to both parents and is per child so when you and your partner have a baby you can claim £20,000. If you are lucky enough to have twins then you can claim £40,000 free life cover and so on.
It is possible to take out excess cover on top of your free cover which you will need to pay monthly premiums on. We would advise Contractors to have enough cover in place to pay off any outstanding debts and also provide a safety net for your family to fall back on if the worst should happen. The free cover will end on the child’s first birthday by which time you should be back on your feet financially and able to take on the repayments which will be relatively low on this level of cover. Our advisers will be on hand to help you arrange an affordable cover to suit your individual needs.
How do I arrange the cover?
It is quick and easy to arrange your free life cover with ContractorFinancials. The award winning protection advisers will take your application details over the phone and the entire process can be completed via email, telephone and post. So you can arrange the right protection for your family without the hassle of a face to face meeting at this already hectic time.

As a Contractor, you may not have replaced your lost ‘death in service’ benefits that you used to benefit from as a ‘permi’. But when you become a parent the safety net that this cover provides becomes vital to protect your children if the worst should happen.

Treasury focus on ‘false self-employed’ in construction

Posted by Redego | Posted in Agency, News | Posted on 30-09-2009

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Treasury focus on ‘false self-employed’ in construction
HM Revenue & Customs (HMRC) have been exasperated for many years by the way the construction industry behave as if the rules on paying workers gross don’t apply to them.
They published a new consultation (July 2009) that has the look and feel of the finished article, so its more than likely to become legislation before the end of 2010.
Reading between the lines, HMRC see this as the final attempt to align the construction industry with other sectors and get 300,000 ‘false’ self-employed subbies on to PAYE. Genuine self-employed workers will be able to continue trading by passing a simple 3 criteria test.  To qualify, sub-contractors would have to either:
provide their own plant & equipment (normal tools of the trade do not count!)
provide all the materials for a contract OR
provide other workers
So, how will the construction industry respond?  To be fair to the industry, they have always had to balance between being ‘compliant’ with competing with other contractors who pay workers on a ’self-employed’ basis.  To make matters worse, the test for employment status has always been complex, based on case law and constantly changing, so they could genuinely say they didn’t know whether a worker was self-employed or not.
Now there is a workable status test, and the Treasury’s intention has been clearly stated, most contractors will probably decide that the risk of non-compliance is too great and make arrangements to pay their workers through PAYE.  They can do this through their own payroll or outsource to a compliant PAYE umbrella company, which will give workers the opportunity to claim legitimate expenses

HM Revenue & Customs (HMRC) have been exasperated for many years by the way the construction industry behave as if the rules on paying workers gross don’t apply to them.

MSC legislation will affect relationships between contractors and agencies

Posted by Redego | Posted in Articles | Posted on 06-08-2009

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The new legislation that penalises managed service companies–companies that are run for contractors by providers–has sent a powerful message throughout the industry. There is real concern on the part of agencies and recruiters about the status of the contractors they work with. Are you running your own limited company, or is someone else running it for you? In the latter case, you may have trouble getting more work.
Demand for Repayment Without Notice
Says David Vincent of the London-based Lawspeed, a legal consultancy specialising in contractor affairs: * Recruiters and agencies are most likely to be concerned about 3rd Party Liability – tax debt arising from an association with a managed service company which incurs a tax debt that HM Revenue and Customs cannot recover. Recruiters could be liable for managed service company tax debts after 6 January 2008 and the sums involved could be very significant especially where a recruiter or agency has a large number of contractors on their books.”
”If a transfer of debt is activated there is an immediate joint and several liability for the agency or recruiter whether or not a debt notice is served,” Vincent explains. This means that the employment provider could find itself liable for contractor tax debt without even knowing about it! The Revenue will simply appear at the door, as it were, one day and demand repayment.
Recruiters and agencies are most likely to be concerned about 3rd Party Liability which is tax debt arising from an association with a managed service company which incurs a tax debt that HM Revenue and Customs cannot recover
David Vincent-Lawspeed
” Recruiters and agencies are likely to view this as very unfair because it could have a very detrimental effect on the balance sheet and overall value of their businesses.”
Checking on Status
“Recruiters are likely to be more prescriptive in determining whether a worker company is a managed service company, This may add to administration and slow down the sign up process,” Vincent warns.
In other words, your agency or your recruiter will want to be very certain that you are not working in anything that could be even loosely defined as a managed service company. Some agencies have already circulated questionnaires to their contractors asking for definitions of status. But this is probably only the beginning, as further checks will be made, probably extensive ones at the times a contractor is under consideration for a given contract.
Compliance Checks
What Lawspeed expects is that recruiters and agencies will undertake regular compliance checks of their contractors as well. And they will want to ensure that providers register all their limited companies with the Revenue. “They will also undertake spot checks on PAYE slips provided to the worker to ensure payment is full PAYE,” Vincent adds.
What this means in practice is that contractors should know for certain what the status is of the limited companies they are running, and that they should be in a position to prove that status if required to do so. If contractors are unable to prove the independent status of the companies they run, they risk losing contracts.
Failing to ensure independent company status could well mean loss of contracts
ContractorCalculator
Contractors need to be very aware of this issue which is unquestionably the hottest topic iin the industry today. Ignore it at your peril.

The new legislation that penalises managed service companies–companies that are run for contractors by providers–has sent a powerful message throughout the industry. There is real concern on the part of agencies and recruiters about the status of the contractors they work with. Are you running your own limited company, or is someone else running it for you? In the latter case, you may have trouble getting more work.

Pressure mounts on the construction industry

Posted by Redego | Posted in News | Posted on 31-07-2009

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The Treasury have now produced their consultative document promised in the last budget on what they like to call ‘False Self Employment’ in the Construction Industry.

It is clearly an attempt to extract more money out of the industry. They have estimated that of the 860,000 self employed subcontractors in the UK 300,000 have been wrongly described as self employed and if these workers were re-classified as employees the Treasury would benefit to the sum of £350 million per year.

Temp worker opportunities in Eastern Europe

Posted by Redego | Posted in News | Posted on 31-07-2009

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Eastern Europe shows strong potential for temporary workers, according to new research from Eurociett and Interconnection Consulting.

Focusing on Bulgaria, the Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia, the report shows that most significant opportunities lie in countries where the sector is best established and that have a sound regulatory framework in place – particularly Poland, Hungary, Slovenia and the Czech Republic.

How does the pension cap affect Contractors?

Posted by Redego | Posted in News | Posted on 31-07-2009

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Since ‘A-day’ in 2006, the pension’s simplification rules have allowed Contractors to dramatically reduce their tax bills by contributing a large proportion of their income into a pension scheme. In fact, the only barrier to cap your contributions was the lifetime allowance of £1.75 million and the annual allowance of £245,000 (for 2009/10) and aside from this, it was left to the individual to decide how much to contribute from your annual income.