Disputes should be resolved much quicker thanks to the ADR team (Alternative Dispute Resolution), who as an independent HMRC entity will help resolve any disputes at the compliance check stage, before an assessment is made. It’s hoped that this should help many more disputes to be resolved before they get anywhere near the tribunal stage, saving both time and money and no doubt a huge amount of frustration for small businesses.

The way the world is right now anything that makes government more efficient and cuts costs has to be applauded, the fact that this should help build a better relationship between the tax man and the types of business the UK government is relying on to dig it out of a whole is just a massive added bonus. Will the ADR fulfill its potential? Only time will tell.

Dispute With HMRC? Things Should Get Better is a post from: UK Contractor Services Offshore Contractors

In short it seems that if people are prepared to burden the risk and consider contracting as an option there are still plenty of opportunities available. Contractors just have to keep in mind that it’s up to them to make sure they are working under the best possible deal they can and it’s absolutely in their best interest to make sure the risk is suitably rewarded by staying as tax efficient as possible.

Contracting Still On The Rise is a post from: UK Contractor Services Offshore Contractors

What could account for this robustness? Perhaps it has to do with the fact that as companies look to make efficencies IT becomes a major part of those cost savings? Automated systems and cutting down on the man hours required to perform certain tasks are an excellent way of making real savings in what you spend month on month. The contractor market in particular can benefit from these efficencies because the last thing companies want to be doing right now is hiring a full time position in order to save a full time position elsewhere. During the boom times of the last 90′s and early 00′s this was common practice. New systems came with new IT staff! It is perhaps for this reason again that traditional database and office integration skills are in high demand. The “get in and get it done” nature of most IT projects have always lended themselves to shorter term contracts as opposed to full time positions and now as efficencies are looked for it’s IT contractors with the right skills that look to be struggling least.

Are You An IT Contractor, Have You Struggled To Find Contracts?

Still Plenty Of Work For IT Contractors? is a post from: UK Contractor Services Offshore Contractors

Of course it is easy for experts to make predictions but one report does seem to have backed it up what most predict. The highly regarded London Employment Monitor report found that there was an 11% improvement in in financial services opportunities just for the period of March 2011. We’ll have to see how the rest of the year pans out but growth anywhere near that level would surely be welcomed by the many people who have been suffering badly for the past few years. Of course the opportunites may be there but it still doesn’t take into account how good those opportunites are.

We’d like to know what you think though. Do you work in the financial services market, have you seen an improvement in the number of job opportunites?

Is The Financial Services Market Recovering? is a post from: UK Contractor Services Offshore Contractors

The Employee Benefit Trust has been a popular alternative to the Umbrella Company for many years. Hundreds if not thousands of self employed contractors and other high net worth professionals (such as those in the creative arts) have taken advantage of the higher rates of pay that can be achieved via the use of an Employee Benefit Trust payroll solution. Where as a typical Umbrella Company gives a gross to net contract ratio of around 65% many EBT solutions offer a return of up to 85%. The opportunity to keep an extra 20% of YOUR pay has been seen as a massive bonus to high earners.

Employee Benefit Trusts also became popular because of the added security they offered. By using an Employee Benefit Trust and becoming an employee scheme members were granted full statutory employment rights and benefits. The lack of a need to keep complicated expense details also endeared this solution to those who preferred to spend more of their time earning money instead of doing paperwork. This was a massive advantage over those that either used an Umbrella Company or who chose to setup their own Limited Company. At this point you’re probably thinking that an Employee Benefit Trusts sounds too good to be true, how come everybody isn’t using them?

The answer to the second question is simple. In order to gain any advantage from an EBT you really need to be earning above a certain level. Some scheme providers set this level at 40,000 a year, others at 50,000 a year. The too good to be true bit is a little harder to explain. In essence it comes down to risk. Employee Benefit Trusts were so tax efficient because of the nature of the loan payment that was given to the employee (i.e. the contractor). The contractor was paid a basic salary and the rest of the money was “loaned”. Because this was paid as a loan (and not as salary) there was no guarantee that the loan wouldn’t be called in. Of course all providers marketed that this wouldn’t happen and that they had various methods of making sure the loan wouldn’t be asked to be repaid. Fine unless the payroll provider encounters money problems which could result in the loan being sold as an asset. Could you imagine the company that now owns that debt not asking for the money back? As far as the legalities go there has been a split with regard to EBTs. The general consensus appears to be that those that are based onshore whilst those offshore were effective.

So even with all the advantages that an Employee Benefit Trust offers their popularity has declined massively.For many contractors the risks associated with an EBT are seen to out way the advanatges. A scenario that has not been helped by several scheme providers being investigated by HMRC. The question is what alternatives are there? The governments stance on contractors seems to go against encouraging innovation and excellence within business. How can you expect people to take the risks associated with working for yourself if the bottom line is no better than being employed to do the same job(minus paid holidays, pension)? It’s all too easy for Civil Servants in comfy 35 hours a week, 30 days a year holiday, final salary pensioned posts to interfere in areas of business where they have no understanding. It is every contractors duty to be paid in a compliant tax efficient manner and Employee Benefit Trusts have played there part in this process.

Unsure about using an Employee Benefit Trust, find out more about a more robust solution.

Employee Benefit Trust. An Alternative That Actually Works! is a post from: UK Contractor Services Offshore Contractors

As well as technology at the actual venues themselves London as a whole will see upgrades to various services including an extension to the existing Wifi network and the addition of internet access to the underground. Finding the space to comfortably “surf” may be a whole different problem! A lot of money will also be invested in making sure that emergency service access is maintained.

A large part of the case for winning the Olympics as the money invested is that it would generate sizable numbers of jobs and it looks like contractors are going to be included in those that benefit. How long term these posts will be will have to be seen but any increase in demand for skilled IT professionals can only be a good thing in the current economic climate.

Are You Involved With The Olympics? is a post from: UK Contractor Services Offshore Contractors

Montpelier in a media release described the raid as “heavy handed and wholly inappropriate”. They have also expressed their disappointment with the Manx government in allowing UK HMRC officers to be sworn in as special constables for a day. It was perhaps this element that most had the finance sector baffled. The company will now have their legal fees covered by the police and will be looking to sue for unlawful entry, search and seizure of property.

We’ll have to wait and see how this one finally turn out but for now it is surely a big embarrassment for the Manx government but of no consolation to those that lost their jobs.

Montpelier Raid Ruled Against is a post from: UK Contractor Services Offshore Contractors

Following the Written Ministerial Statement on 6 December 2010 and as announced at the June Budget, the Government is introducing legislation to tackle arrangements involving trusts or other vehicles used to reward employees which seek to avoid or defer the payment of income tax or National Insurance Contributions (NICs). The arrangements covered include the provision of a tax-advantaged alternative to saving beyond the annual and lifetime allowances available in a registered pension scheme. In many cases, these third party arrangements allow an employee to enjoy the full benefit of a sum of money paid or assets provided while arguing that, because of the structure of the arrangements, there is no legal right to the money or assets. This argument is used to support a proposition that income tax and NICs is due (if at all) only on the use of the money or assets during the period of the employee’s employment and not on their full value.

HM Treasury
9 December 2010

Obviously anybody thinking about changing their circumstances should seek professional advice. We can only go on (and repeat) what we’ve been told but it’s very rare to get such an undivided opinion on a matter like this, an opinion that says that this is the end for Employee Benefit Trusts.

Currently using an EBT but looking for a tax efficient alternative? APS may have the solution for you! Find Out More

Contractors Tax Gets Simpler – EBTs Ruled Out is a post from: UK Contractor Services Offshore Contractors

Montpelier Tax Consultants Raided is a post from: UK Contractor Services Offshore Contractors

When one high profile government minister was asked on live TV if he goes out of his way to pay more tax than he possibly could, of course he replied “no”. That is everybody’s right, to work within the law to reduce your tax burden is being prudent, in fact some would call it common sense. We can’t see that changing in the next 12 months, can you?

This has all come about as the UK government makes a commitment to crack down on people using tax evasion and avoidance. Prosecuting tax evaders is absolutely right. On the other hand cracking down on people who are operating 100% within the law to reduce their UK tax burden seems a curious decision. Not really sure how that’s going to work. As part of this commitment there is mention again of targeting people using trusts as a way of avoiding tax. This of course has a massive impact on the UK contractor market, at the very least it causes a lot of unease and muddies the water on what schemes do and don’t “work”. We couldn’t answer that question, nor would we ever try to. You ask 100 people about any payroll scheme and I’m sure you’ll get 100 different answers. What we can say though is that we have spoken to several EBT scheme providers and it seems as though some are resigned to the fact that their current scheme is very unlikely to be viable after the 2011 budget.

The truth is that whatever the UK government decides to change in legislation will have to be spelled out. There is no room for assumption. Until that is done no payroll scheme provider can guarantee that their solution will still be in operation in 2011. It all depends what is written into law in the 2011 budget, until then it’s very much as you were.

Is Tax Avoidance The New Tax Evasion? is a post from: UK Contractor Services Offshore Contractors