Crystal Umbrella

An IR35 case involving Larkstar Data Ltd has been re-referred to the General Commissioners.  The first time that the General Commissioners heard this particular case, it actually ended with a win for the owner of the company, Alan Brill.  When the case was heard by the High Court, the result was much different as the Court backed HMRC instead.

It is fairly unusual to see the High Court reverse the decision of the General Commissioners.  This has led many people to believe that something was unusual about this IR35 case.  Sir Donald Rattee said that not all of the evidence has properly been examined by the General Commissioners and that it was essential that they reconsider the case.

There were four main reasons why HMRC decided to appeal against the ruling originally made by the General Commissioners.  Of these four reasons, all but one has been disregarded.  In order to see the case reheard, only one of the reasons needed to stand.

John Brazier, of the Professional Contractors Group, said “This case illustrates why PCG’s advisers have historically always taken cases to the Special Commissioners rather than the Generals.  The Generals are a lay tribunal, which increases the chances of this kind of error compared to hearings before the Specials, who are professionally qualified.”  

When the case was originally heard, Brill chose to represent himself.  He is expected to have a much more difficult road in front of him as his case heads back to the General Commissioners. 

Source: www.contractorcalculator.co.uk

A protest regarding the hiring of staff members from outside the United Kingdom has led many workers at oil refineries across the country to walk out during this week.  Workers at the Forties Pipeline System, which is owned by BP and the St Fergus gas plant which is owned by Royal Dutch Shell are participating in strikes along with the workers at Total plants.  Several contract workers also chose to strike at a power station in Cheshire which is owned by Scottish & Southern.

Strikers came together in Lindsey to ask the government to protect their jobs from foreign workers.  The unemployment rates are increasing rapidly and many contractors are worried that they will be out of a job before too long.  At the Total plant, workers from outside of the UK were told to remain at home as the strike continued.  It is estimated that around 600 contractors from the plant were a part of the strike.

In response to the striking workers, Prime Minister Gordon Brown, said “I understand people’s anxieties about their jobs.  The action we’ve taken to help people in work to stay in work, to help people who lose their jobs to get new jobs, to help young people to get skills, it’s the right way to deal with that.”

Meetings are are currently underway to resolve the complaints that have been raised by the striking workers.  Some of the oil companies are experiencing lower output due to the strike but some, including BP, report that operations are continuing as usual.

Source: www.bloomberg.com

Many IT contractors have had a sense of security in the midst of the global economic crisis.   For the most part their jobs seemed to be secure.  Now as the economy is entering into a recession, IT contractors are beginning to feel the pain.  Since the economy has tightened, IT departments are trimming as much fat as possible from their staff.  There are fewer staff being hired on a temporary basis too.

While a significant number of IT employees are finding their jobs eliminated, IT contractors who typically earn higher salaries are also noticing that opportunities are growing scarce.  Now ING, a Dutch bank, has said that they will be cutting around 7,000 positions which will allow them to save around one billion pounds.  Of the cuts that ING is expected to make, only around 35 per cent of them are expected to come from full-time staff.  The remainder of the jobs will most likely be held by contractors or consultants.

No specific figure was given for how many contractor jobs are likely to be shed.  A spokesperson for the bank did say “We are critically looking at our IT projects, to determine which are the most urgent and where we can save costs.  For IT vendors we will, where possible, renegotiate contracts in terms of fees paid per hour.”

One other large company that is expected to reduce the number of IT contractors that it employs is Microsoft.  The software company would not provide specific numbers but did say that more contractors would be cut compared to full-time employees. 

Source: www.contractoruk.com

HM Revenue and Customs is facing a bit of embarrassment after they incorrectly sent out letters to several taxpayers in Huntingdonshire.  The letters claimed that the taxpayers owed HMRC National Insurance Contributions amounting in most cases to a few hundred pounds.  Several letters were sent out by accident after a failure to properly update the records.  A person that had changed jobs during the course of the year might have had missing information in their records about the switch which could have led to the issue.

One person in the area who received a letter was Stephen Oliver who feared that people received similar letters all over Britain.  He said “I feel like invoicing the Inland Revenue for my time. I have had 60 employees ask me what is going on and I have told them on no account to send off any money.”  Oliver said he expected that a number of people will assume that their employer has not been properly deducting the taxes from their income.

A spokesperson for HMRC said that letters of apology would be sent out to those that received the original letter in error.  It was also pointed out by Oliver that taxpayers had to pay for the incorrect letters to be mailed out by HMRC and now they would be forced to foot the bill for the letters of apology as well.

The HMRC said that they were working hard to make sure their records are updated so that this would not be an issue in the future.

 Source: www.huntspost.co.uk