SThree are one of the industry’s leading recruitment agencies. They have reported a sharp fall in their 2009 revenues in comparison with previous years. However, it is good news for contractors as they have announced that the contracts section has continued to do well despite difficult conditions.
The recession has caused problems across industry over the past eighteen months. Not only have businesses been faced with the prospect of their own insolvency but they have also had to prepare for the prospects of their customers becoming insolvent and the subsequent knock-on effect on their finances.
As borrowing continues to be problematic this year, it is predicted that small business owners with financial difficulties may find themselves looking for financial assistance from their family and friends, not to mention borrowing on personal finance such as credit cards. This information comes courtesy of a survey conducted by Graydon UK, a commercial credit reference agency, and the Forum of Private Businesses. The information was based on 2009 but with these issues still prevalent in 2010 it is likely that the same pattern will continue.
PCG, who represent contractors and freelancers in the UK, have now given their response to the landmark BN66 ruling at the High Court. The case centred around IT consultant Robert Huitson making a challenge against HMRC’s right to claim taxes retrospectively. Mr Huitson’s lawyer had argued that the retrospective tax levy was a breach of his human rights. Mr Justice Parker, presiding, disagreed stating that HMRC were within their rights to challenge users of artificial schemes and such individuals were given warning that this could be the case. There has since been widespread concern throughout the industry that this decision will open the doors for further retrospective tax liability.
The industry as a whole is still digesting the BN66 ruling which was handed down at the High Court last week. Mr Justice Parker ruled that HMRC could retrospectively claim tax back as far as 1987.
Back in July we reported the news that contractor Andrew Tilson had been taken to an employment tribunal by Alstom Transport and the tribunal had determined that his relationship with the company was tantamount to an employer-employee relationship. This ruling was based on a clause within his contract which stated that “the individual was not subject to Alstom’s direction, supervision or control” even though this was somewhat different to the day-to-day working practices. The tribunal decision meant that Tilson was able to claim employee rights.
The Royal Court of Justice has ruled against the retrospective effect of BN66 being unlawful. Mr Justice Parker presiding disagreed that there was a breach of human rights with regards to the backdating of the Finance Act Section 55. This retrospective rule has only been in effect since 2008 and imposes tax liabilities dating as far back as 1987. This is the first time that the rule has been backed by the courts. Mr Justice Parker also refused an appeal. Delivering his ruling he stated that had the taxpayer acted prudently there would be no cause to challenge the backdating.
The ruling in the largest case ever heard in London’s Technology court has now set a precedent for end users to claim large payouts from contractors who exaggerate their skills and experience.
PCG, the body representing freelancers and contractors, have commented on the EU 2020 consultation. They have stated that they welcome the objectives of the strategy. EU President Barrosso has set in motion plans for a more sustainable social market economy which should result in a better use of resources, skills and knowledge. The strategy for turning this ideology into practice is the EU 2020 Strategy. The consultation period on this strategy commenced in November and ended on 15th January. PCG submitted their comments to the EU Commission and highlighted the need for wider recognition and promotion of freelancing as a career option.
The Chartered Institute of Taxation are concerned that a large proportion of the 25 million tax code notices currently being issued by HMRC are wrong. They are requesting that HMRC launch a publicity campaign to make people aware of the potential errors.
