Crystal Umbrella

The Professional Contractors Group will be present at Embedded Systems Conference UK (ESC UK) in Farnborough between the 6^th and 8^th October. Visitors to their stand (451) will have access to an abundance of information pertinent to contractors; whether you are an existing contractor or you are thinking of becoming one. This will include information on insurance, tax issues, accounting, personal finances and plenty of practical advice

There are currently 1.4 million contractors working across all sectors in the UK. The current economic climate, coupled with redundancies, means that many more people are choosing to set up in business for themselves.

John Brazier, Managing Director of PCG said: “In many ways freelancers are the embedded system of the workforce, often brought in to fulfil a specific function vital to performance, but receiving little recognition of the value that they contribute; they are the unsung heroes of the workplace. Irreversible structural, social and economic trends mean that freelancing is here to stay – it is a valid career choice and not just a stopgap for many and the growing number of professionals who are opting to go freelance is proof of that.

“Moreover, freelancers are increasingly being recognised as an immensely important, contributing group by major organisations and crucial to the success of UK plc. PCG has a wealth of advice and support available to anyone managing or thinking about setting up a freelance business and we encourage anyone considering freelancing to visit our stand at the exhibition to find out more.”

Tech recruiter Morson has credited contractor recruitment with boosting its profits and helping them to outperform their rivals. In fact, Morson have stated that the skilled contractors that they provide for infrastructure projects have helped them to cope “far better” than their industry rivals.

Morson has seen their pre-tax profits rise from £4.1m to £4.9 million for the six month period to June with an overall turnover of £219.9m, up from £212. They currently have 9,000 techies on their books.

Morson has commented that this “solid trading” results from new orders received within the rail, nuclear and defence sectors. They have also acquired new clients, namely EADS, Thales and Ericsson while BAE Systems and Airbus have extended existing contracts. The company believes that this is a sign that they should expect “further progress” in the coming year. This is even more likely given the potential for new contracts through the Olympics and the access to European opportunities through EADS.

Ged Mason, chief executive of Morson, said: “We do believe that the provision of outsourced technical services and technical resource is a resilient market and remains strong with good long-term prospects. In particular, the market benefits from skill shortages and the ongoing investment in long-term infrastructure that is required in the United Kingdom.”

With regards to their income, fees received from permanent recruitment accounted for just £400,000, down 50 per cent. In fact permanent recruitment represented a mere 2.2 per cent of Morson’s net fee income. By contrast, contract recruitment accounted for £14.4m of the firm’s total £181.1m in received fees.

Despite existing debts, which have lessened, Mason stated that the firm is “very much seeking to position the business to gain market share.”

The Professional Contractors Group has arranged the National Freelancers Day which is to take place on 23^rd November. This will become an annual event. The aim of the event is to celebrate the work carried out by freelancers and contractors, often considered the ‘third way’ to work.

John Brazier, managing director at PCG said: “We wanted to establish a special day for all freelancers so that on National Freelancers Day this third way of working is recognised and we can celebrate the talents, achievements and worth of freelancers up and down the country.”

National Freelancers Day will operate under the five themes which PCG believe are key to optimum working conditions for contractors. These are: the right to work freelance, fair and equitable taxation, recognising that freelancers are in business on their own account, Government assisting the relationship between contractor and client and the respect of contractors for their contribution to the economy.

Brazier commented: “We have seen a significant increase in the number of people opting to go freelance over the last ten years and today there are 1.4 million freelancers in the UK. PCG wanted to establish a special day for them and on National Freelancers Day we can recognise freelancing and celebrate the talents, achievements and worth of freelancers up and down the country.”

On the day a ‘Manifesto for Freelancing’ will be drawn up which PCG then deliver to candidates standing in the next General Election.

More information can be found on the official website www.nationalfreelancersday.org.uk

Following on from the speech delivered by the Financial Secretary to the Treasury, Stephen Timms, earlier this week, HMRC have unveiled a new Internet service which can be used to blow the whistle on tax evaders. The website – www.hmrc.gov.uk/tax-evasion – will enable members of the public to raise any concerns regarding the non-payment of taxes directly with HMRC. They have recently introduced a new penalty system that allows them to charge 100% penalties to individuals or businesses found to be evading tax.

Timms said: “We are committed to ensuring the tax system operates fairly and efficiently, and encourage anyone to share their information on activities they think may be unlawful. Reporting your concerns online is quick and easy. By doing so you will be helping us to catch people who are unfairly competing with honest businesses and denying funding for essential public services. Being able to report potential tax evasion online is just the latest step in demonstrating that for tax cheats the game is up. Information provided by the public is important and HMRC takes all allegations seriously.”

On their website, HMRC commented: “Clamping down on those who try to cheat the system through evading taxes is a key priority for HMRC and since 2005 over £42 million has been recovered as a result of information received directly from members of the public through the taxman’s confidential hotlines. The money is put back into the system to fund vital public services.”

Recently reports suggested that contractors who had contracted swine flu could potentially be putting others at risk by refusing to take time off work. However, as the country gears up for the expected second wave of the H1N1 virus, the government has predicted that large organisations could experience sickness levels of 12% of the workforce at any one time. This could impact on contractors receiving payment on time, particularly if payroll staff are taken ill, as there is a reliance on staff creating a BACS file each Wednesday to ensure that contractors receive their funds on a Friday.

Research carried out by law firm DLA Piper has found that “very few” recruitment agencies have contingency plans in place to ensure continuity of payments should their payroll staff take time off sick. The survey, which questioned 400 organisations, found that most firms stated that they were planning to review their contingency plans due to the expected resurgence of swine flu. However, more than half of those surveyed had not communicated planned contingencies to their staff or suppliers.

Head of employment at DLA Piper UK, Tim Marshall said that many employers had failed to look beyond their staff contracting the virus. He commented: “Managing the absence of employees who need to care for dependents may prove to be one of the biggest issues of all, particularly if local authorities…close schools.”

Contingency systems provider, Giant Precision have stated: “With the government predicting that swine fly will confine swathes of the workforce to their sick beds this autumn, depleted departments could be reduced to a skeleton staff and struggle to cope with their normal workload.”

Matthew Brown from the organisation continued: “A contingency system should as a minimum be capable of taking raw payroll data from the agency and processing this data through to BACS or CHAPS payments to workers.”

The Professional Contractors Group reported that none of its members had raised any issue regarding the effect of swine flu, however, their head of public affairs Simon McVicker said that he planned to discuss this further with IT recruiters.

The Association of Chartered Certified Accountants has carried out research about small businesses. They spoke to 2,000 adults about a variety of issues. Despite the current economic climate and the negative press surrounding the influx of workers from overseas, 96% of people surveyed felt that small businesses play a vital role in society. In fact, the recession is not putting people off starting their own business, as 60% of respondents expressed a desire to be their own boss. This entrepreneurial spirit was even stronger amongst the younger generation, with 75% of 25-34 dreaming of running their own company.

Head of business advisory services for ACCA, Glenn Collins, said: “Small businesses are the lifeblood of the UK economy and it is wonderful to see that people have such a high regard for the role SMEs play within the community. Running a business is seriously hard work and requires skill, dedication and drive. It is hugely encouraging that so many respondents – especially so many young people – aspire to be their own boss. This entrepreneurial attitude bodes extremely well for the next generation of business leaders.”

The survey also asked what businesses people would choose to start up. Around a fifth expressed a desire to open a shop but there were many more original ideas.

Speaking about this business flair, Glenn Collins said: “Creativity is imperative in business and people have certainly been creative in some of their business suggestions. I’m not convinced there is a huge market for stationery for dogs, but space tourism could really fly!”

The financial secretary to the Treasury, Stephen Timms is due to give a speech to industry tax experts regarding the effect on the economy of those who do not pay the tax they owe. The Observer has reported on the content of this speech based on exerts they have obtained.

He is expected to declare that these people are not only flouting their legal obligations but also their moral obligations. Timms will be stating that everyone should pay their ‘fair share’ of tax within our society and that “values of responsibility, morality and integrity are essential to tax fairness”.

The speech is intended to send a clear message on the need for tax evasion and tax avoidance to stop. It is expected that Timms will speak about this issue in the context of the current economic downturn, primarily focusing on the effect that non payment of tax has on public services. We all know that there is a strain on the economy at the moment and Timms will be stressing that the payment of tax “carries a responsibility for every taxpayer”.

Timms is also likely to disclose his proposed measures for dealing with people who continue to flout the rules. It is likely that these will include an increase in disclosure requirements and bigger penalties. The pre-budget report is due next month and this is also expected to include further details on how tax evaders will be dealt with.

The Professional Contractors Group (PCG) has been warning of the effect on contractors and freelancers of insolvent trading partners. New insolvency figures made public last months show that one per cent of companies went under during the year ending June 2009. The reality is that when companies go into liquidation, invoices are left unpaid. The PCG have stated that times are tough for contractors at the moment and the extra strain of unpaid invoices is adding additional stress.

The PCG is working to make its members more aware of the warning signs of struggling businesses. They advise that contractors should be on the look out for late payment of invoices, high staff turnover, a request to change the terms of their contract or difficulty getting hold of your contact at the company.

However, many contractors have already been faced with this situation. One technical consultant spoke to The Independent about his experience working for a company in Tanzania. He had looked into the company’s finances before he flew out there but he did not receive any money owed to him. When he challenged this, he still received nothing. He had no choice but to return to the UK.

Of his experience, he said: “I realised the organisation was sinking. My only course of action was to stop providing the service. I got some money back via a debt collection agency but nowhere near all of it.”

Contractors should also be aware of services which can help them to credit check companies before they commence work with them. Barclays Bank offer credit checking free of charge. You can also access information on www.businesslink.org.uk

Specialist Insurer RIAS has conducted research which proves that the over 50s make a positive contribution to the economy. The ‘Still Giving at 50′ report showed that 1.7 million over 50s own their own business, while 21m people in the age range had contributed ^6.5 billion to the economy last year.

The report was commissioned to specifically look at the financial effect of people in this age category. It showed that the average income for a person of 50 years or over is £294 per week which is more than their under 50 counterparts. While it may be suggested that this income primarily consists of pension payments, in actual fact the research showed that only one fifth is from state benefits, including pensions. Now that people are choosing to work for longer, more than half of the income actually comes from wages.

Janet Connor, Managing Director at RIAS, said: “The public stereotype has long been that the over 50s are a drain on society with an expected life path, taking more out of the public purse than they put in. In reality, the complete opposite is true. People over 50 make a positive contribution financially, and feel much more satisfied with their lives, because they feel more relaxed and have more time to do the things they want.

“Our latest research report shows that the over 50s should be celebrated for their outlook, life experience and the knowledge they can pass on to other generations. From their entrepreneurial spirit, through to their record-breaking achievements, today’s over 50s are diverse, complex and aspirational – one size really doesn’t fit all!”

It had been hoped that the implementation of the Agency Workers Directive would be postponed; however Gordon Brown has confirmed that it will become law within the next few months. The Prime Minister made this promise when he was addressing the TUC Congress.

The Directive has caused concerns amongst contractors and agency groups alike. It is feared that this EU directive would make contractors a less attractive option due to the employment rights that it would award them. The original aim of the Directive was to protect the most vulnerable agency workers.

The Prime Minister said: “I believe that the fight for fairness must include agency workers, and so I pledge to you today that when Parliament returns our new legislative programme will include equal treatment for agency workers and that in the coming few months the law will be on the statute book.”

This promise by Gordon Brown was met with condemnation from the Association of Recruitment Consultancies (ARC) whose chair, Adrian Marlowe, said: “”Forget Liverpool, Union leaders must be living in la la land if they think bring in the Agency Workers Directive now will protect one job. If this directive goes ahead it will hit jobs and the economy hard. The Government should think twice of the true cost of implementing the directive at cost in excess of £2 billion, money the Country can ill afford. At a time when employers need flexibility and encouragement to take on new workers gold plating the directive will simply lead to greater unemployment.”