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Senders of tax returns will be given a little leeway by Her Majesty’s Revenue and Customs (HMRC) this year due to the nationwide postal strike.

The 31^st October date for returns is being put back to the 2^nd November as the 31^st falls on a weekend. It’s worth noting also that any returns received the first working day after the deadline will be accepted, too.

Because of the postal strike, HMRC has also stated that any tax returns received after November 2^nd will be processed as normal – so long as the sender has proof that they posted it on or before October 31^st.

It’s also worth noting that any tax returns that are unable to be completed on time can be handed in to the nearest tax office by November 2^nd. Those electing to complete tax returns online have until January 31^st to submit theirs.

Senders of late submissions will face a fixed penalty of £100, although if the sender has a valid excuse for their tax return being received after the deadline, it is possible to appeal.

Any taxpayer who can prove that their return was posted on or prior to October 31^st is within their rights to appeal and is likely to have the £100 penalty overturned.

Those submitting their tax return via post are advised to obtain evidence of the posting date, as HMRC do not check the postmarks on any tax return received after November 2^nd.

New research has shown that contractor belief that there is still money to be made within the financial sector. The research, conducted by Giant, showed a 50 per cent increase in the number of IT contractors who believe that the majority of their business will be based in financial services compared with those surveyed six months ago. More than half of those surveyed also stated that despite difficulties in the sector they still believed that they would be in receipt of a pay rise.

Matthew Brown of Giant stated: “In the aftermath of Lehman Brothers’ collapse, IT directors and team leaders at investment banks were forced to let contractors go. But more than 12 months on since the bank’s demise, the IT jobs situation is different because now those same team leaders are being instructed to start hiring again.”

This sentiment was echoed by the Association of Professional Staffing Companies when speaking to Contractor UK. Their director, Marilyn Davidson, stated that there is “a bit of evidence to support the feeling that things are getting better.”

Mr Brown said: “Earlier this year the sheer scale of the downturn in the job market was dawning on everyone and so securing an income to pay bills and mortgages became an understandable priority. We are not at the end of the tunnel just yet but these figures suggest [that] as IT contractors are less nervous about the prospect of being out of work, they are starting to place greater emphasis on career issues, such as the opportunity to develop their skills, when selecting contracts.”

The Professional Contractors Group (PCG) are set to request immediate clarification from HMRC regarding a recent article which appeared in the Daily Telegraph. The piece in question suggested that tax inspectors could be set to get tougher on individuals before they have actually broken the law.

The specific section of the Daily Telegraph article about the definition of tax avoidance, read: “Avoidance is not defined in the Taxation Acts…One definition is ‘a situation where less tax is paid than Parliament intended, or more tax would have been paid, if Parliament turned its mind to the specific issue in question’. At a practical level the problem is then essentially one of deciding what Parliament would have intended and identifying who should be asked to decide this”.

Chairman of PCG, Chris Bryce, responded: “Clearly if this is a new departure for HMRC we are very concerned. HMRC must act within the law of the land. Our legal advice is that if HMRC ever did take anything to court on these grounds it would be thrown out and fined heavily. The suggestion that tax inspectors should pursue people who have arranged their financial affairs in perfectly legal ways based on a retrospective analysis of Parliament’s collective thinking is outrageous. Minimising one’s tax bill is a perfectly legal and proper course of action. These new guidelines, if true, strike one as Orwellian in the extreme.”

Bryce confirmed that the Group would be seeking further explanation from HMRC.

Shadow minister Jonathan Djanogly has spoken out to confirm that even if the implementation of the Agency Workers Directive is pushed through by the present government prior to the general election, a full review would be carried out by the Conservatives if they were to come into power.

Mr Djanogly was speaking at a House of Commons reception hosted by the Association of Professional Staffing Companies (APSCo) when he stated that the existing AWD consultation period has been too short and he believes that it should have been extended past December.

Ann Swain, chief executive of APSCo said that Djanogly had estimated the cost of the AWD being implemented in its current form at round £4billion per year. Swain also stated that if the controversial Directive becomes law without any further amendments the economy will surely suffer as more jobs are lost at a time when the economy is still trying to recover.

She continued: “We support Jonathan Djanogly’s view that the consultation period needs to be extended and that the draft regulations should be revised if they are too damaging to UK plc. With the implementation of the regulations delayed until 2011 there is now a real prospect that whoever the next government is could make significant amendments to the regulations before they even come into force.”

Damian Broughton, managing partner at accountancy firm Danbro said: “The good news is that there is a delay in the implementation of the AWD to 1 October 2011, and that it will not apply to all those who are genuinely self employed. There is also possible good news in the knowledge that if the Conservatives win the next election they will have a ‘total review from top to bottom’ of this and other regulation that affects this industry.”

The Association of Recruitment Consultancies, however, stated: “Although the change of heart is welcome, there is no room for complacency. There is still much that is wrong with the proposed legislation in its current form, and more work is required.”

It is fair to say that the effects of the recession have been felt by employers across the UK. However, figures show that both Scotland and Northern Ireland have actually experienced an increase in IT recruitment over the past five years. However, the majority of recruiters in Scotland admit to the recession affecting their team morale due to increased workloads and training cutbacks.

Jacqui Hepburn from the Alliance of Sector Skills Councils in Scotland has said that while the IT sector was indeed affected by the recession there are now signs that it is “clearly stabilising”. Much of the strength of the IT sector in Scotland has been attributed to the lessons learned from the demise of the dotcom years and the acceptance by businesses that they must be flexible in their business models.

Jacquie Hepburn commented: “The IT professional workforce will be central to the UK’s recovery from recession. All industries need, and will continue to require, highly skilled technical professionals. There is an arguably even greater need for business-focused technologists who can understand business needs, know how to apply IT to solve business problems, and can manage technology projects to deliver direct business value.”

The ‘Skills, Business and the Economy’ report which was published a number of weeks ago included advice from the Alliance that the Scottish IT sector could be boosted by encouraging more young people to train for careers in IT.

Ms Hepburn concluded: “The UK must continue to invest in the technology skills pool: from the IT professionals who create the systems, to the business managers who need to be able to exploit them for business benefit, to the individuals who need to be able to use them in their day to day jobs.”

It was only last month that the Prime Minster declared that the controversial Agency Workers Directive would become law over the next few months. This was followed by a promise from the Conservative Party that should they be elected at the General Election, they would delay its implementation for as long as possible.

Back in September Gordon Brown said: “I believe 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 books.”

However, his declaration was met with an abundance of criticisms and it would seem that there has now been a u-turn on his pledge. Lord Mandelson, head of the Department for Business, Innovation and Skills has stated that the Agency Workers Directive will not come into force until October 2011.

The directive must be implemented by the end of 2011 under EU rules but its implementation in the UK has certainly been a contentious issue as it will award agency workers the same rights as employees after 12 weeks. It is supposed to protect the most vulnerable agency workers, however high earning contractors fear that clients may think twice about offering them work as a result of the Directive.

A further draft consultation has now been published and Pat MacFadden, Business Minister, had this to say: “Last year the Government secured a deal in Europe on the Agency Workers Directive that allows us to base Britain’s rules on the agreement reached in the UK between the CBI and TUC. This allows us to implement the Directive in this country in a way which gives fair treatment to agency workers and maintains labour market flexibility. It was only possible because the Government is engaged in the mainstream of Europe – actively influencing proposals coming from Europe which affect the UK economy and UK workers. Careful and sometimes difficult negotiations were required to get the CBI-TUC agreement reflected in the final EU Directive.”

He concluded: “As the Prime Minister has said, the Government is committed to getting this legislation on the Statute Book by the end of this Parliament. The law will come into force in the UK in October 2011, giving recruiters and their clients time to prepare and plan. We are also mindful of the need to avoid changing requirements on business until the economic recovery is more firmly established.”

Yesterday, a multi-disciplinary search for illegal immigrant herb pickers took place throughout several locations in the Thetford, Norfolk area. The agencies involved were the UK Border Agency (UKBA), the eastern Region Intelligence Unit, Immigration Crime Team, Norfolk Constabulary, Gangmasters Licensing Authority (GLA), UK Human Trafficking Centre, Migrant Workers helpline staff and the Inland Revenue.

Warrants were issued for five teams to carry out searches at various properties. These searched uncovered 34 illegal workers, 3 of whom were immediately detained on immigration charges at the port of Harwich. The others included five Hungarians, three Polish and 23 Indian nationals.

The suspected ringleader of this operation, a 49 year old man, was also arrested and is being held in custody on suspicion of bringing illegal immigrants into the country. Large quantities of cash were uncovered and police will be investigating possible money laundering offences.

A spokesman for the UKBA said: “Officers from the UK Border Agency, with support from the police and HMRC, have carried out an operation into immigration related crime in the Thetford area. As this investigation is ongoing, it would be inappropriate to make any

further comment.”

A spokesman for the GLA said: “Six enforcement officers from the GLA worked with partner agencies today in the Thetford area to investigate suspected unlicensed gangmaster activity and other allegations.”

Senior investigating officer, DCI Mark Lay of the Eastern Region Intelligence Unit, said: “This was a joint franchise operation using the skills and expertise of partnership agency staff. The operation displays how criminal gangs can be dismantled using

the powers and offences of all the agencies.”

Detective sergeant Stuart Bailey from Norfolk Constabulary said: “These are very serious offences and we have worked with our partners to carry out the warrants and make an arrest. Despite the scale of the operation and the resources involved, the impact on the community was minimal with no disruption to those neighbours living in the areas affected.”

As the country awaits the now-inevitable postal strike due to take place tomorrow and Friday, businesses up and down the country are bound to be affected. However, spare a thought for those eager to ensure that their self-assessment tax return is received on time. Tax returns filed late are subject to fines. However, in circumstances, such as the impending postal strike, it is out of the individuals’ hands.

It would seem that HMRC have recognised this. As such, they have issued a statement in which they guarantee to waive such fines for self-assessment tax returns which are received late as a result of the strike. There are, of course, conditions relating to this. Each individual must be able to prove that their tax return was posted in plenty of time but was delayed due to the strike. Anyone with such proof should be able to appeal the £100 fine. This means there is no scope for people “trying their luck” despite accountants commenting that it is inevitable.

HMRC are very strict with regards to their 31^st October deadline and only mitigating circumstances would usually result in them waiving a late fee. However, speaking to the Daily Telegraph, s spokesperson for HMRC said that “circumstances of the [postal] strike” would almost certainly result in the fine being waived.

The Institute of Chartered Accountants in England Wales commented: “There is a tradition for some to put off doing their tax return until the bitter end, but this will only cause more stress than is necessary. Also, with the threat of a postal strike it is a good idea to aim to get your paper return in ahead of time so you won’t risk the £100 penalty.”

The Financial Services Authority have unveiled plans to ban self-certification mortgages which is sure to have a major impact on contractors who wish to buy houses. In recent years, when lending was at an all time high, both the employed and the self-employed were able to gain self-cert mortgages, meaning that no proof of income was required. Predictably this mean that many people were less than honest and subsequently fell into difficulty with their mortgage when the recession hit. This earned self-cert mortgages the unfortunate nickname ‘liar’s loans’.

The FSA commented: “The best way to deter individuals from applying for, and lenders from accepting applications is to require income verification in every case.”

On the subject of how this would affect contractors, the FSA stated: “We can think of no reason why the self-employed or contract workers would not be able to verify their income. An income flow that is ‘non-regular’ and fluctuating is not equivalent to, nor does it imply, one that is ‘non-verifiable’. Even income…received only once or twice a year should be capable of verification.”

The FSA is planning “further analysis” on how contractors would prove their income. It is thought they would be required to produce their tax returns or priced contracts. However, it is unlikely that an accountant’s certificate will provide sufficient proof on its own.

Backing up their planned reforms, the FSA said: “The FSA needs to ensure that firms only lend to people who can afford to pay the money back. The reforms the we have announced today will ensure that the mortgage market works better for consumers and that it is sustainable for firms.”

Contractor UK spoke to an IFA working primarily with self-employed who concluded: “Compulsory verification of a borrower’s income, which will effectively kill the self-cert mortgage market, …comes as no surprise.”

Research conducted by Parity on behalf of the Recruiter has shown fresh challenges facing the financial sector. There has been much speculation that the economy has now stabilised and should be showing signs of recovery. As such, companies are making plans for new business and new projects. However, it would appear that they are not planning the staff that they will actually require to carry out these IT led projects, therefore they are likely to be reliant on IT contractors who are able to start work with short notice.

The Parity research showed that 86% of the firms surveyed had not yet found the staff they would require for IT projects that are in the pipeline. The remaining 14% stated that they had briefed their HR departments on their future staffing requirements.

Pre-recruitment screening firm, Powerchex, stated that recruitment within the financial sector in the period since June has shown a decline of more than a third in comparison with the same period last year. Also, they confirmed that there was a drop of fifty per cent in the number of IT contractors requesting screening for work within the financial services sector during the month of September.

Chief executive of Parity, Alwyn Welch, accused many IT bosses of being “short sighted”. He continued: “Ultimately, if your IT function is not ready to go when the green light is pressed on a project, you won’t be able to react quickly enough to market changes. Financial organizations talk about moving on from the credit crunch but until that message gets through to their IT department, they will stay in recessionary mode.”