Crystal Umbrella

The Recruitment and Employment Confederation have issued some heartening news for jobbing Umbrella Company Employees looking for new assignments in 2013.

A survey of 600 employers found that despite sluggish movement in most sectors across the board, the market is expected to inch towards small incremental growth throughout the next 12 months. While most of the employers surveyed said that they are looking to recruit and retain permanent staff, the outlook for freelancers and contractors does not look any less promising in comparison, with 88 percent of employers planning to increase their numbers of temporary staff.

Speaking about the findings, chief executive of the REC Kevin Green pointed to them as proof that the UK business is battling through a difficult period with some success: “These are encouraging signs. Even though the wider economic outlook may still be uncertain and growth forecasts have been revised downwards, the resilience of this country’s labour market cannot be in doubt.”

All this could mean that areas such as those that have consistently demonstrated a demand situation driven by shortages of appropriately skilled staff – and companies looking to continue opting for more fluid recruitment solutions – could be a rich source of opportunities for specialists with the skills to exploit them.

Busy Umbrella Company Employees who have little time to set aside for hunting down their next assignments might be interested in a new mobile app that does the job even while on the hoof.

There has been a massive trend toward mobile use over the last few years alone, with over half of the UK’s population owning at least one device. The likelihood is that the trend will accelerate next year, with the number of people using mobile devices outstripping those who use desktop PCs.

This has pushed recruiters to make job searching easier. More people are using the ever-expanding functionality of smartphones and tablets to do their job seeking, especially as it can be done on the way home on the train or from the comfort of the couch.

The latest app, developed for the global recruiter Fusion People, is designed to harness the potential of smartphones, tablets and their users alike. It not only pushes vacancy notifications when it is not in use, increasing the likelihood of users finding out about roles and applying, but it also customises vacancy searches in line with the user’s aptitudes and experience, harnesses personal profiles to notify users of relevant opportunities, and enables applications to be made from within the app.

Mobile apps such as this provide busy contractors with another highly accessible means of finding new placements. The mobile apps will not replace traditional methods of communication between recruiters and contractors, but they are another useful string to the assignment-hunting bow.

Umbrella Company Employees who specialise in web development and software engineering have not only enjoyed a surge in demand but also a hike in pay rates, according to a leading recruitment firm.

Contracting as a software engineer or a web developer has rarely been more lucrative, new figures from Harvey Nash reveal. Between the beginning of August and the end of November there was a record-breaking surge in the purchase of smartphones and a simultaneous shortage of digital and mobile skills, the recruiter’s report finds.

It confirms findings in a recent technology industry survey that sampled 20 contractor roles. This revealed that, of all IT workers, freelance software engineers and web developers were the most likely to have a secured a pay rise in 2012.

The Harvey Nash study also suggests that employers are turning to contractors in preference to permies. Permanent openings in the industry fell by 4% during the four-month period, while contractor roles leapt by 19%.

The firm’s CEO, Albert Ellis, said: “The new digital economy continues to provide forward momentum in what is a lacklustre overall recruitment market. The economic uncertainty throughout the world has meant that clients have tended to favour flexible contract and temporary hiring above permanent recruitment.”

More clients wish to maintain a flexible workforce through hiring contractors while continuing to invest in new digital technology platforms and emerging markets, the recruiter explains.

It is not difficult to see why: economic conditions remain too precarious to justify much confidence in permanent hiring; however, consumers are shifting their online spending habits to mobile devices as never before, driving huge demand for digital skills.

A recent survey by online recruitment firm webrecruit brings encouraging news for Umbrella Company employees on the lookout for new assignments: a massive majority of UK employers, of all shapes and sizes, intend to hire more staff over the next 12 months.

In a context where no one can be absolutely certain that the UK’s recession has really turned the corner, 89% of hirers plan to expand their temporary and permanent personnel during the next year. Given the growing uptake of contractor solutions by British firms, it is a fair bet that a healthy proportion of the new posts will be contracting roles.

Just under half (46%) of respondents expect to recruit up to ten new staff members. As the number of planned recruits increases, however, the percentages decline, as might be expected: 19% of those polled said they intended to hire between 11 and 50 new recruits, 7% planned to hire between 51 and 100, and only 3% intend to expand their headcounts by between 101 and 205. The surprise number, though, is that a substantial 13% – the third largest group of hirers – said that they planned to appoint over 250.

Webrecruit’s founder and director, Phil Roebuck, hailed the results as “fantastic news”, with most businesses either planning modest increases in staff numbers or preparing for “dramatic growth.”

He added: “Given that we’re continuously surrounded by talk of how the economy is in crisis, this really shows that there is positivity for many businesses. It isn’t all doom and gloom out there, and I think we could all do with looking to the future and keeping the past behind us!”

For oil and gas engineers working through Umbrella Services north of the border, lucrative times appear to be afoot.

As part of the Scottish Government’s Oil and Gas Strategy, which was developed in collaboration with industry experts, £10 million has been allocated to support innovation in the oil and gas sector. The huge injection of cash into an industry that relies heavily on contractors is likely to generate a surge in demand for Umbrella Company engineers with the right skills.

Interim managers can also expect to be headhunted, as the funding is designed to seed new projects to keep offshore assets running efficiently and safely. To this end, change management specialists will play a key role. Inspection and analysis of the integrity of the operations will also be a high priority.

Scottish Energy Minister Fergus Ewing said that Scotland’s oil and gas sector is world leader. He went on: “With more than half of the value of the North Sea’s oil and gas reserves yet to be extracted, up to 24 billion recoverable barrels with a potential wholesale value of £1.5 trillion, oil and gas will remain an enormous economic resource for decades to come.

Ewing added that the new funding “meets a real need.” The sector, he insisted, has a bright future and is “no stranger to innovation”, having taken enormous strides to secure Scotland’s place at the top of the global industry.

Industry spokesman David Rennie agreed with Mr Ewing’s sentiments, adding that the huge success of Scotland’s oil and gas sector has made a major contribution to the country’s prosperity. By increasing innovation with the new funding, he said, that success would continue.

The government’s knee-jerk capitulation to media hyperbole over senior civil servants evading tax by working through personal service companies is likely to have ramifications in the private sector as well, KPMG has warned.

This unplanned consequence of the new rules proposed by the Treasury hinges on the term ‘controlling person’ which, according to Jayne Vaughan, head of employment tax affairs at KPMG, applies to “all employers – not just government departments.” She said in an interview with ContractorUK:

“There are likely to be a number of individuals who are routinely engaged via PSCs and could be caught by the definition of ‘controlling person’, suggested to include, for example, having managerial control, controlling budgets and/or the workforce.”

Of course, this is likely to apply to a number of contractors working through limited companies in the private sector as well. Ms Vaughan did not mince her words: the new rules could “ban the use of limited company contractors in situations where they would be acting as ‘controlling persons’ in a business.”

Will there be a contractor stampede toward umbrella companies? A spokesman from the tax and accountancy firm PKF thinks not. The legislation actually states that all ‘office holders’ should be on PAYE payroll and, as virtually all of the newly defined controlling persons are already office holders rather than independent contractors, the rules will have little effect beyond the public sector.

Philip Fisher, PKF’s head of employment, said that the only true solution was to unify tax treatment for the employed, the self-employed and contractors running their own companies. He added that the chancellor seems averse to tackling such a “hornet’s nest”.

The potential perils of IT contracting through limited companies have just been foregrounded by the successful prosecution of an IT freelancer for tax evasion.

IT consultant Stephen Maxwell was found guilty of tax evasion last week after a series of investigations by HMRC. The Revenue’s statement reveals that Mr Maxwell failed to declare income from his consultancy work totalling almost £2 million.

The money was earned between 1998 and 2008 and was channelled by Mr Maxwell into various offshore companies registered in the Isle of Man and Gibraltar. From 2005, the income was paid into his limited company.

Mr Maxwell commanded pay rates of up to £800 per day during the period under investigation, much of it from top City of London firms. He arranged for it to be paid into the offshore firm Gateway 3000 Ltd through several different companies, ostensibly seeking to hide his identity as the final recipient from HMRC.

His decision not to submit any tax returns for his limited company, however, was almost certain to arouse the Revenue’s suspicions. He is estimated to have evaded £623,015 in tax.

Currently remanded in custody pending further reports, Mr Maxwell’s riches to rags story was quickly brandished by HMRC. Revenue spokesman David Odd said that this was a case of “deliberate and systematic fraud.” He added: “Income tax fraud is not a victimless crime and HMRC take a very serious view of anyone who acts in this manner. For anyone choosing not to pay the tax they owe, this case proves that we will vigorously pursue them and bring them to justice.”

Suddenly, PAYE umbrella services seem like the sanest and safest option.

In what was a strong month for recruitment in the IT and Computing sector, umbrella companies are gaining hope that they, along with their contractors, will be able to see a rise in jobs in this sector.

According to a report published by the Recruitment and Employment Federation (REF) at the beginning of April, the IT and Computing sectors saw an eight-month high reached when it came to permanent jobs being made available, representing a significant growth in the industry. As employers face a slowdown in the number of available candidates, more companies could now request the services of contractors as they bid to fill the increasing gaps in their workloads.

Tom Hadley, Director of Policy and Professional Services for the Recruitment and Employment Federation said of the report: “This is good news for job-seekers and a positive indication of increasing employer confidence. Recent tax changes announced in the Budget, the Youth Contract and reductions in red tape for businesses that came into effect this month should further boost employer confidence and accelerate hiring activity. The benefits of flexible staffing arrangements are well established and other REC data provides some positive indications in terms of the outlook for temporary work in the UK.”

With the Recruitment and Employment Federation recently calling on the government to address legislation in a bid to make it more streamlined to help recruitment agencies with the stress they are currently facing when it comes to hiring people, reports are showing that employers are keen to maintain or even increase their temporary workforce.

The customary post-Christmas surge in job vacancies is no flash in the pan, according to new research from recruiters Adecco: billings for PAYE umbrella contractors and permanent jobs alike remaining encouragingly high in February, dispelling fears that January’s high-point was simply a conventional carry-over from the usual Christmas-period boost.

Umbrella companies serving the IT skills market did especially well: ads for both permanent and temporary jobs in IT and telecoms rose in February, indicating a favourable outlook in 2012 for those who earn their living through IT contracting.

Surprisingly, and contrary to expectations, contractor vacancies also increased in the public sector: temporary contracts rose by 2% on January’s total. The general and staffing sector (which includes retail and engineering) also saw a healthy rise in demand for permanent posts of 6%. Traditionally, the January rise in appointments falls off rapidly in February but the Adecco figures offer hope that annual the trend is at last being bucked.

Steven Kirkpatrick, Adecco’s Managing Director, welcomed the figures and maintained that they indicate January’s encouraging results were no mere “flash in the pan”. Rather, they suggest the return of much-needed confidence amongst employers with each passing month.

Mr Kirkpatrick added: “As expected, there has been a slight decline in advertised temporary roles compared to January’s traditional increase. However, the decline is minimal, supporting the results of our recent research which found that companies have handled the introduction of the Agency Worker Regulations very well and have generally found it to have little impact on their business.”

Many jobbing PAYE umbrella contractors will be rather pleased that they chose not to work through their own personal service companies following an ambiguous statement in yesterday’s Budget relating to contractor taxation. Already a chorus of concern has been sounded by a number of prominent industry experts, who fear it may be a knee-jerk reaction to the media feeding frenzy surrounding top civil servants who work through their own limited companies.

No one will be surprised to learn that, as widely predicted, IR35 regulations will remain in place unchanged, and that measures will be implemented in April to improve HMRC’s administration of them. The statement that has squeezed expert adrenals announces that the Government is to consult on “requiring office holders/controlling persons who are integral to the running of an organisation to have PAYE and NICs deducted at source by the organisation by which they are engaged.”

The PCG lost no time in responding to these words, stating that it was “deeply concerned about the ramifications of this proposal on the interim sector and we will seek urgent clarification on what exactly this will mean for freelancers.” The organisation’s MD, John Brazier, said that the plans sounded “ambiguous,” and could have an adverse effect on senior interims. He added that it is “crucial that these legitimate businesses do not suffer as a consequence.”