Contractors who work in the motor industry in the North East of England will be pleased to learn that their prospects are looking good!

Japanese car manufacturer Nissan has a large car assembly plant in Sunderland and last month it announced the creation of 1,000 additional job opportunities. Nissan intends to build 4 new models at the factory in the next two years.

Nissan’s plans have already had a positive impact on the supply chain and now Calsonic Kansel, which manufactures parts for Nissan, is planning to hire another 145 people at its Sunderland plant. Calsonic Kansel intends to invest as much as £15.3 million in the Sunderland site in order to expand its product offerings.

David Cameron was delighted to hear the news saying it showed the Japanese have confidence in British manufacturing and the commitment, flexibility and skills of the local workers.

Sunderland is getting a good name for itself in the global automotive sector. Nissan first set up there in 1986. By 2007, 400,000 vehicles were rolling off the production line every year.

Councillor Paul Watson also welcomed the Calsonic Kansel announcement, saying it was yet more good news for jobseekers in the City following recent expansion plans by SNOP, Vantec and of course Nissan.

The North East of England has not enjoyed the best of fortunes since the Tyne and Wear shipbuilding yards closed. Hopefully the area is now set to boom as a centre of excellence for the manufacture of automobiles.

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When AWR first came onto the scene there were major concerns that the legislation would have an adverse affect on umbrella company contractors and other temporary workers. It now appears that those fears were largely unwarranted.

The REC recently released results of a research survey of recruiters that showed that agencies were still seeing high demand for temps and contractors. In fact only around 15% of those surveyed said they had noticed a change in demand since the introduction of AWR at the beginning of October last year.

However, a worrying fact did emerge from the survey and that was that 40% of REC members were seemingly oblivious to AWR. Considering the amount of publicity about the regulations prior to their introduction, such a high percentage defies belief. Furthermore, 51% of recruitment agencies acknowledged its existence, but said it had not impacted the way its workers view temporary positions in any way at all.

The REC has been monitoring the effects of AWR on a monthly basis and last month it discovered that the Regulations are causing agencies to incur more costs and complete additional paperwork. Despite this, most recruiters say the temporary marketplace in the UK remains very much open for business and the predicted fall in demand has yet to materialise.

It will be interesting to see whether HMRC’s much heralded IR35 business test has any affect on the way contractors view their work status. AWR doesn’t appear to have had a startling impact; maybe the IR35 test will be nothing more than a storm in a teacup as well.

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Image: Storm in a teacup by BruceW.

The long awaited IR35 guidance was published on Wednesday. The guidance will enable contractors to determine if their contract is disguised employment or if they really are in business in their own right.

HMRC has published a PDF file on its website that tells taxpayers of its new risk-based approach to deciding if people comply with IR35 legislation.

The Revenue explained that it helps people determine whether they are at a high risk of falling under IR35 and what steps you need to take. There are also 6 sample scenarios that demonstrate how IR35 could be applicable to a particular contract.

HMRC has confirmed that this document was drawn up in conjunction with the IR35 Forum.

The guidance also suggests that contractors retain evidence of their working arrangements in case they are subject to an IR35 review at a later date. According to HMRC, if you can prove you are outwith the scope of the legislation, and your circumstances do not change, the Revenue will not look into your working arrangements again for at least three years.

HMRC has also stressed that the Business Entity Tests and the 6 IR35 scenarios are not carved in stone. This is a pilot project and whilst the test and scenarios can help you assess your level of risk, it is impossible to draw up guidance that accounts for every eventuality.

Of course these tests are voluntary; there is no obligation to do them and even if you do and discover that you fall in the high-risk category, you don’t have to inform HMRC. What you may want to do is get advice from an umbrella company.

The Revenue has also set up a helpdesk to deal with enquiries from concerned contractors.

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SQ Computer Personnel, a recruitment agency that specialises in jobs for IT contractors, said recently that it received more new instructions in March this year than it had in any other month during the last two years.

The founder of the company, Bernie Potton, whilst obviously delighted with the extra business, said it was too early to tell with this was the start of an upward trend.

He could well be right to feel cautious. Hudson, a recruitment firm that hires nationwide, said that IT contractor billings in the first quarter of this year were down on the comparable period last year. Hudson’s experience is that IT contractors are only being used for business critical and niche technology projects at the moment.

Stuart Rogers, Hudson’s associate director in charge of IT recruitment, said clients are adopting a more cautious approach when it comes to taking on contractors. They believe they can make significant savings by replacing contractors with permanent members of staff.

That sentiment was echoed by ReThink Recruitment’s Michael Bennett who said his company has also witnessed an increase in demand for permanent IT staff and a corresponding decrease in demand for temps and contractors. A lot of the recruitment drives ReThink is running at the moment are focussed on replacing contractors, he added.

IT contractors are increasingly looking to extend their current contracts due to the lack of new opportunities. Instead of trying to negotiate a new rate, they are agreeing to the same terms, and in some cases agreeing to work longer hours.

The IT jobs market seems to have become more client-driven. We’re seeing a decrease in demand and an increase in supply. The laws of economics say that when this happens prices go down and that’s exactly what’s happening with contractor rates.

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Contractors in Scotland may have started to wonder what their future will be after the Scottish Referendum on Independence takes place.

Scottish people will be going to the polls in the autumn of 2014 to decide whether they want their country to be independent of the rest of the UK. The PCG was quick to take up the cause of its members are seek assurances from the Scottish Parliament that whichever way the result goes, contractors north of the border would not be disadvantaged.

Fergus Ewing, the SNP Cabinet Minister in charge of energy, enterprise and tourism, met recently with PCG members in Edinburgh. He was able to reassure them that the Scottish government would not turn its back on the contracting community. He said he wanted to know about the barriers facing contractors and explained that he wanted them to feel free to run their businesses.

He went on to say that contractors can sometimes feel isolated, but he wanted them to know that self-employed people were welcome in the Scottish economy.

The PCG delegates also spoke with shadow ministers are raised their concerns with them. Ken MacIntosh, a labour MSP and shadow minister for enterprise, said he would be interested in meeting up with Scottish PCG members and this should happen later this year.

Contractors can rest assured that the PCG is doing everything in its power to ensure that leading politicians in Scotland do not ignore the contracting community.

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Umbrella company contractors might find themselves under more scrutiny after it was revealed that some recruiters have been targeted by conmen.

The scam works like this; the scammer gets in touch with a recruiter saying they require a contractor for a specific assignment. They even say they know exactly who they want to do the work. In the majority of cases, the scammer also contacts the recruiter, this time posing as the preferred candidate.

The recruiter sets up the assignment as usual and starts paying the contractor. Recruitment agencies tend to pay their contractors prior to receiving money from the client, so this is normal practice. But, of course in the case of the scam, the ‘client’ disappears and the recruiter is left out of pocket, having already paid the ‘contractor’.

This scam was recently brought to the attention of the REC when a member company reported they were unable to trace client or contractor.

The REC warned recruiters to check that potential clients were legitimate, preferably by visiting them at their premises. If that is not feasible, they should phone the company and verify that the client does exist.

This is not the first time conmen have attempted to scam recruitment agencies in this way. Recruiters should always be cautious when it comes to assessing new leads and ensure they carry out the appropriate identity and references checks on new candidates.

If you feel you are under undue scrutiny, don’t be alarmed. Recruiters need to protect themselves and professional agencies should carry out strict checks as a matter of course.

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Contractors working through limited companies might be tempted to switch to umbrella companies once the full extent of the Revenue’s IR35 assessment criteria becomes known next week.

We still don’t know exactly what the business entity test is going to entail as its launch has been deferred, supposedly until May 7th.

The weighting allocated to each question has been devised according to HMRC’s criteria. Contractors scoring between zero and 10 will be classified as high risk of falling under IR35 legislation. Those with a score of between 11 and 20 will be medium risk and anyone with a score of 21 or more will be low risk.

Contractors need to be aware that they can be awarded minus points for some answers. For example, if you say you were employed by a company through PAYE in the last financial year and are now working as a contractor for the same firm, you will be awarded minus 15 points. On the other hand, if you are lucky enough to have employees who contribute at least 25% to your turnover, you get a massive 35 points and shoot straight into the low risk bracket.

The Revenue seems determined to implement its own system of weightings even though business groups have advised them against it. It remains to be seen how many contractors will find themselves at medium or high risk of falling under IR35, but I’m sure there will be a lot of complaints when the test finally does go live.

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It’s not only small business owners who are going to have to keep on working past normal retirement age, according to the Pensions Policy Institute.

According to the Institute’s research, millions of us will still be working after our 75th birthday because we have not been making adequate financial provisions for our retirement. A whopping 45% of people aged over 50, and that includes contractors, will have to carry on working for 11 years longer than they had originally hoped in order to have a comfortable retirement.

Life expectancy has increased over the last three decades and although the government has raised the normal retirement age slightly, this in no way compensates for the fact that we are living longer.

Joanne Segars, the National Association of Pension Funds’ chief executive, said millions of Brits are in for a rude awakening when they realise they haven’t enough money to retire. People who don’t want to see their living standards fall either need to save more or work longer.

The pensions gap in the UK is the largest in Europe and Aviva says that we should be putting an extra £10,300 into our pensions each year if that gap is going to close completely. But can anybody really afford to put away £200 a week into their pension fund when some people don’t even earn that much over the entire year?

The problem is made worse by falling annuity rates. A pension fund that guaranteed a lifetime income of £15,640 at the beginning of the 1990s is worth just £5,800 a year now.

You’re never too young to start saving for your retirement! The sooner you start, the larger a pot you’ll have to draw on when you do eventually do decide to sit back and take it easy.

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Image: help a piggy-from-the-future out? by {Guerrilla Futures | Jason Tester}

IT contractors should be aware that HMRC will track down anybody it believes could be guilty of tax evasion as a Scottish consultant found to his cost recently.

53-year-old Stephen Maxwell, who currently resides in Dumfries and Galloway, hid nearly £2 million from the Revenue; money he earned whilst he was working as an IT consultant for banks based in London.

Between 1999 and 2008, he consistently attempted to hide his income from HMRC. The banks paid his consultancy fees into companies registered in the Isle of Man and Gibraltar, but Maxwell was a hidden beneficiary of these companies.

According to HMRC Scotland’s assistant director of operations, David Odd, Maxwell operated a deliberate and systematic fraud through his IT consultancy business. HMRC takes a very serious view of people who defraud the Revenue.

Genuine taxpayers are the victims of income tax fraud and the Revenue will vigorously chase anyone it believes is acting dishonestly and bring that person to justice.

Kirkcudbright Sheriff Court remanded Maxwell in custody until the 26th April after HMRC investigators in Leeds looked into his business and income tax records.

Contractors operating through an umbrella company do not need to worry so much about their tax affairs as the umbrella does it for them. But IT contractors working though a limited company or operating as a sole trader need to be aware that HMRC has a zero tolerance policy for tax evasion and they would be well advised to make sure their tax affairs are in order before an inspector comes knocking at the door.

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Contractors with young families may be aware that HMRC has overhauled the tax credit scheme.

Before the start of the new tax year, people could claim Child Tax Credit providing their income did not exceed £41,300. However, as from the 6^th of April this year, the upper earnings limit is based on individual circumstances.

If your annual income exceeds about £26,000 and you only have one child, you are unlikely to qualify for Child Tax Credit. The same is true if you have two kids and an income in excess of about £32,200.

Claimants can also only get their payments back-dated for one month instead of the previous three.

HMRC has warned that claims for tax credit need to be renewed no later than the 31^st of July, or payments will cease. In 2011, one in five claimants missed the deadline.

The Revenue is asking claimants to make doubly sure they provide accurate information and warns it may contact claimants’ employers to verify information if it harbours any doubts. As well as changing the income limits for Child Tax Credit, the Revenue has also increased the working hours rules for couples who have at least one child and want to claim Working Tax Credit.

Steve Lamey, the director of benefits and credits at HMRC, said people should act as soon as their renewal pack arrives. The sooner they return it to the Revenue, the sooner they will receive the correct amount of money.

A new scheme called Universal Credit is set to be introduced next year and the government intends to switch all tax credit claimants to the system by 2017.

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Contractors may want to head for the clouds of Scotland after enStratus announced it plans to set up operations in Edinburgh.

The cloud computing firm intends to create about 30 highly-skilled jobs in the Scottish capital within the next three years after receiving a Regional Selective Assistance grant.

The Edinburgh office has not yet opened, but the firm is already recruiting and contractors could be well placed to offer assistance until the company gets properly established.

Culture and external affairs secretary, Fiona Hyslop, said the skills of the Scottish workforce have made the country a force to be reckoned with when it comes to enterprise, innovation and technology and there is no doubt that this encouraged enStratus to set up its European base in Edinburgh.

Meanwhile, IT contractors may want to concentrate their job-hunting efforts online after Monster revealed that hiring in the sector is now at its highest level in more than four years. The Midlands has seen the greatest increase in online opportunities when viewed year-on-year, but job-seekers in Wales have witnessed a decrease in the number of companies recruiting online.

Julian Acquari, Monster’s MD for UK and Ireland, said the IT industry is going from strength to strength and this is really encouraging news. The overall outlook for the UK is still mixed, but at least 67% of industry sectors are growing and this suggests that online recruitment is picking up.

The latest Report on Jobs from the REC/KPMG also showed that the IT sector registered an increase in permanent hiring last month.

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Image: Somewhere in the Scotish Highlands – I can’t really remember where. by Rhys Davies Photography

Contractors who work in web design could find themselves in demand over the next few weeks as the deadline looms for the implementation of new data protection rules.

According to research by KPMG, 95% of organisations with a website are not ready for the changes even though the UK secured a 12-month deferment on the EU cookie-related requirements.

Nearly all UK firms are running the risk of receiving a penalty, which could be as much as half a million pounds, if their websites do not ask visitors for permission to use cookies to monitor their online habits. However, it is not enough just to update their cookie usage policy, the EU Directive on Privacy and Electronic Communications expects more than that.

Stephen Boner, a partner at KPMG, explained that even though enforcement occurs on the 26th of May, most UK organisations still have a lot of work to do to make their websites compliant. During the course of KPMG’s analysis, the company only discovered one website that specifically asked visitors if they opted-in to the cookie policy and that’s surprising considering it’s the main requirement of the EU directive. Even more surprising was to find a couple of sites that did not use cookies at all. Some sites are using thousands of cookies, but the average per site was between 5 and 10.

Mr Boner went on to say that time was running out and organisations should be focusing on analysing the cookies they already use and drawing up a plan to make sure they comply with the new directive.

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Image: Cookies by zingyyellow…wish I could bend space/time