PCG on hand at Embedded Systems Expo to offer advice on setting up in business
PCG, which represents the UK’s freelance contractors and consultants, will be on hand at ESC UK from 6th to 8th October to offer practical advice to anyone considering setting up as a freelancer. Visitors to the show can meet PCG on Stand No. 451 where they will glean essential information on tax issues, insurance, accounting, personal finances and other practical tips about running a business alone.
Today there are 1.4 million freelancers working in the UK across all sectors and IT and engineering contractors represent a growing percentage of those people opting to set up their own businesses. PCG has 18,500 members who benefit from the support of an organisation committed to looking after their interests.
PCG welcomes the Government's tightening of work permit
PCG, the voice of UK freelancers, has expressed disappointment at the findings of the Migration Advisory Committee’s (MAC) Report on the abuse of the Work Permit system. The Committee, tasked with advising ministers on immigration policy, has just released its recommendations on how to reform “Intra Company Transfer” (ICT) work permits, which are frequently abused by large companies. ICTs often lead to the displacement of skilled resident workers, such as IT contractors. Instead of tightening the rules to limit the use of ICT permits in the recession, the MAC called for stronger enforcement of the current rules. However the Government has decided to go one step further than this and now forbids the use of ICT permits where they will be directly replacing a settled UK worker.
Read more...PCG member's IR35 victory after five years
Despite the significant evidence of his business set up and the definite lack of control as to how he worked, the PCG member had been subject to HMRC’s gruelling fact-finding and questioning for five years – despite the fact the company had ceased trading with no way of paying the liability!
As with many IT contractors HMRC didn’t understand what the member was doing, how he worked, what the various projects were or how he interacted with the end client – yet they apparently knew enough to decide IR35 applied.
MP's Parliamentary question leaves a further doubt over IR35
PCG noted with interest that Labour MP Terry Rooney (Bradford North) asked this question in the House of Commons on 15th June.
Mr. Rooney: To ask the Chancellor of the Exchequer how many investigations concerning IR35 were launched in each of the last five years; and how many of them resulted in (a) prosecution, (b) an increase in tax due and (c) no further action.
Kitty Ussher: The intermediaries legislation, commonly known as “IR35”, was introduced with effect from 6 April 2000 to counter the avoidance of employed levels of tax and national insurance by individuals providing their services through intermediaries.
Disclosure of HM Revenue and Customs' compliance data relating to the legislation would result in a risk of non- compliance with the legislation. Accordingly I am not able to provide the data requested.
To our knowledge, it is unprecedented for a Minister of the Crown to refuse to answer a Parliamentary question because that answer would result in a risk of non-compliance with the legislation. PCG does not see it as being in the public interest that the effectiveness of tax legislation should be shrouded in a veil of secrecy.
Read more...Disappointment at the findings of the Migration Advisory Committee’s (MAC)
We were to be frank disappointed at the findings of the Migration Advisory Committee’s (MAC) Report on the abuse of the Work Permit system. This is a serious issue for the freelance community, with livelihoods challenged by what can only be described as blatant abuse of the system by large companies. “Intra Company Transfer” (ICT) abuse leads to the displacement of skilled resident workers, such as IT contractors and Engineers and the unlevel playing field created, if not dealt with swiftly and effectively, will have far reaching effects on the freelance marketplace and more broadly long term UK competitiveness.
Instead of tackling the issue head on and tightening the rules to limit the use of ICT permits in the recession, the MAC simply called for stronger enforcement of the current rules. In their report MAC did, however, underpin our concern at abuses and recommended that more resources are deployed enforcing the current rules – something PCG originally called for as part of its submission to the body. The MAC also suggested changes to the way ICT migrants are paid, and recommended that ICT migrants should have worked for their company for 12 months prior to working in the UK rather than six as now.
Let’s hear it for the MAC
The Migration Advisory Committee (MAC), the body which advises Government on its immigration policy, has just begun sifting through the no doubt hundreds of responses it will have received to its “Call for Evidence”. This exercise asked whether and how the immigration system should be tightened, and what economic evidence exists for such a move.
Clearly, this is an important issue that concerns many IT contractors, who rightly feel angered by revelations such as those made in a recent edition of “File on 4” on Radio 4, a program to which we contributed many facts and figures. Reports from our members allege that BT may be massively exploiting a loophole in the immigration system – the “Intra Company Transfer Visa” (ICT). According to these reports, this allows BT to replace hundreds of contractors with “onshored” IT staff at lower cost. Rules within the ICT system are meant to prevent such visas from being used to displace UK workers, yet, unfortunately, this is not what seems to be happening. This is against the spirit of these rules and is undermining the UK contractor market in a recession.
A mere ripple in a duck pond...
Two weeks in anyone’s life is not long, but for MPs it must seem like an eternity. Recent events have even got me wondering whether I have ever claimed anything I shouldn’t…you know, the odd bag of crisps and newspaper buried in a business petrol receipt, or that claim for the Hot Air Balloon flight so as to do some ‘blue sky thinking’ [sorry Gov!…genuine mistake.] Also reminds me of the chap who claimed for a dinner suit and was caught with his trousers down over it. He then told his boss he would resubmit his expenses next week and upon submission, challenged him to find where he had hidden the suit claim.
Starting up as a Freelancer?
This week’s unemployment figures show another 244,000 finding themselves without regular work. In this environment, more and more people will start considering “the third way”. If you are thinking of joining the 1.4 million freelancers in the UK it is not an easy option, but can lead to a fulfilling and exciting career.
If you are interested in setting up as a freelancer, the first thing to consider is what you’re selling – look at your experience and CV and draw out your core competencies and sellable skills (define your product). Cross reference these with relevant job boards and websites. Is there a market for you?
Alistair Darling to crack down on tax avoidance
Chancellor Alistair Darling intends to increase powers to investigate tax avoidance in his Pre-Budget Report.In a speech ahead of the G20 summit this Friday, financial secretary Stephen Timms claimed that the new proposals could mean "the game is up" for tax cheats. Read more...
IT companies 'resilient' against insolvency
Freelance consultants and contractors in the IT sector may be buoyed by news that the rate of firms falling into insolvency has slowed, according to the findings of new research by Experian.IT companies experienced 4.8 per cent less insolvencies than 12 months previously and, with a failure rate of 0.05 in August 2009, scored better than the total UK average of 0.09. Read more...
BCC urges removal of red tape for businesses
The British Chambers of Commerce (BCC) has urged all political parties to give UK business the freedom to drive the economic recovery by cutting red tape and reviewing tax regulations.Its business manifesto, published as leaders of all main political parties prepare to deliver their keynote speeches, sets out a number of measures including the removal of tax and regulatory obstacles, which it says has cost business £77 billion since 1998. Read more...
HMRC to provide tax help for Dorset businesses
Small businesses in Dorset will be given tax help from HM Revenue & Customs (HMRC) next month as the authority brings a free business advice open day to the county.The event, which takes place at the Carrington House Hotel in Bournemouth on October 1st, will bring together a range of organisations including Business Link, the Environment Agency and Jobcentre Plus to advise on a range of issues. Read more...