The annual budget is the government’s financial plan for the nation this year. Typically, the budget contains provisions for taxes, financial services such as pensions, plans for the improvement of the national economy etc.

With taxes and plans for the nation’s financial institutions a regular feature of the budget, you can see why they would prove to be relevant to contractors/freelancers. These are the members of the workforce who most need to know about any changes, since they handle these issues on an independent basis.

The most pressing policy overhaul enacted by the budget was pensions. Pensions are a key issue for those who work on a freelance/contract basis, because they do not have any employer aided options to contribute to their pension saving initiatives.

The government’s pensions policy saw its most radical overhaul since 1921. The Chancellor announced that those saving for a pension would no longer be subject to a law forcing them to take out an annuity; a pension policy which meant that people would have a set amount handed to them each year for their pension; this was calibrated through the money the pension pot accrued via interest rates.
The new policy now allows pension savers to forgo an annuity and take out their pension savings as one lump sum. This policy was put into place due to widespread complaints from savers over prolonged low interest rates. Low interest rates (the Bank of England fixed them at 0.5% to stimulate economic growth) has meant that those living off pensions have had very little to fund their lifestyle.
These provisions hold significant benefits for those who work on a contract basis. The Chancellor’s decision to introduce new options for those wishing to access funds from ‘defined contribution’ pensions will benefit Umbrella company employees, as they are likely to have such pensions from previous employers.

Tony Harris, an expert in the field, summed up what the changes could mean for contractors. Harris wrote that “contractors will be able to exploit the upfront tax benefits, grow a fund tax efficiently, but then have access to the bulk of the fund at or during retirement.” Basically, contractors will be able to more independently manage their pension strategy to suit their needs.
At Umbrella, we recognise the new benefits that the budget’s pensions policy overhaul brings to those working on a freelance/contractual basis. Contact us to find out what you need to know to effectively handle your pension strategy.

The Labour Market Outlook Survey is a quarterly report CIPD; a professional body for those who are a part of the HR industry, conduct with SuccessFactors; a business solutions company. It measures existing labour and employment trends throughout the country by surveying 935 HR professionals and predicts what direction they could take.

The LMO survey used the ‘net employment balance’ measure to come to this conclusion. This is like an equation; the number of businesses planning to hire new staff minus those planning to lay off staff. Using this system the survey resoundingly concluded that small to medium sized businesses overall have more intention to hire than large firms throughout the current year. On the scale the former scored +40, the latter +5.

Furthermore over three quarters of those surveyed indicated that whilst hiring is set to continue to soar as 2014 progresses, it may be at a slower pace than last year. Specifically the net employment balance for the final quarter of last year on average fell from +24 to +16. Delving into specific industries data given on hiring by those in the manufacturing and production sectors was stronger (+34) than data provided by those in the service sector (+24).

The CIPD’s labour market adviser, Gerwyn Davies commented on the finding that low pay awards has led to weak productivity which has led to low wage increases, stifling new employment. Davies said that real wage increases “can only be delivered if organisations can boost productivity, for example through smart investment in the training, development and management of their staff”.
Davies soon went on to note that small to medium sized firms are the exception to the rule. According to Davies their growth is rapid, and increasingly they will need to be “equipped to hire the right people and to rise to the management challenges associated with growth”.

The limited scope of small to medium sized businesses means that often the most efficient path for them to take is to hire freelancers and temporary/contract workers. Considering the quality of skilled worker in these categories that are attracted by the services of umbrella companies, it looks like as small firms set to grow, they will turn increasingly to umbrella company workers to refresh their rosters.
At Paymatters we’ve seen how contract/temporary and freelance workers benefit from the wide array of financial services offered by umbrella companies, which in turn makes them attractive prospects to businesses up and down the country. That looks set to continue in 2014.

The report also noted that pay rates in these areas of industry are continuing to gather pace after the six year peak they climbed to in the final month of 2013. These figures suggest that demand for the use of the services of umbrella companies is on the rise throughout the country.

Going into specifics the report showed that demands for temporary/contract billings was strongest in the North and Midlands. January also saw the rate of demand for new staff surge in both the public and private sector. However this growth was stronger in the private sector than in the public one.

Once the figures from the report were released, REC spokesman Tom Hadley weighed in on what they mean for the UK employment market. Hadley was quick to point out that despite rising living costs; these latest figures indicate good news for workers across the country. This is because a shortage of skills in specific sectors is driving up pay rates nationwide.
Hadley went on to comment that this outlines just “how critical the issue of skills shortages is becoming, as businesses will not be able to contribute to economic growth if they cannot find the skilled workers they need.” Bernard Brown, KPMG partner and head of business services added that many skilled workers are choosing to work on a temporary/contract basis due to wanting to try something out rather than picking up a permanent position right off the bat.

This has led to the popularity of Umbrella companies amongst freelancers and contract workers. An umbrella company exists to handle the considerable tasks of payroll, taxation and other financial issues for those working on a contract/freelance basis. The increase in the amount of workers opting for this method of working means that more people are choosing to outsource the considerable cost of these issues to umbrella companies.

As one of the nation’s top authorities on this issue, Paymatters has seen how the rising popularity of temporary/contract work has seen people turn to umbrella companies. As this trend continues it should further reshape the market.

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For any other Paymatters portal queries please call Paymatters on 0800 121 6513.

We request reviews from all exiting workers to help ensure that the service we delivered was at the standard that was expected. Thankfully our monthly scores are always good to excellent.

As a business, reviews are the best way you can identify any issues.

In the past we have added to our new business script or expanded and rewritten our information pack to ensure it is clear and covers and highlights all key points of working through PayMatters Umbrella Company.

We notify contractors working through PayMatters every Friday whether they are being paid or not. This ensures we can chase any expected payments and ensure everyone that expects to be paid is paid on time, everytime. We even open on Saturdays to ensure any pay queries can be addressed and are able to fasterpay direct into your account advances if required.

Thankfully this approach seems to work as the trend of the feedback we receive from reviews continues to rise month on month.

If you are unhappy with your current umbrella company provider we would be happy to show you our service.

Please call Paymatters on 0800 121 6513.

At PayMatters we thrive on receiving feedback from our clients, employees and suppliers. Like everyone positive and complimentary feedback is always the best and gives everyone a lift. This doesn’t however mean we don’t want to hear complaints or suggestions on things we could do differently. These are often the best way to improve the service we offer.

Fortunately the vast majority of feedback we receive is good or excellent as evidenced by our monthly survey.

When you provide a service to a large number of people and are dealing with thousands of receipts and payments each week then it is inevitable that occasionally something may occur that someone is not happy with.

Normally with an umbrella company a complaint only normally arises if a flexible worker does not get paid on a Friday as expected. These can occur for a number of reasons:

If the worker was late in submitting timesheets, the end client was unavailable to sign these off, funds/remittances are not received from an agency, funds are transferred too late for us to process or funds cannot be allocated if insufficient information is available from the bank receipt.

The good news is that at Paymatters we have acted to ensure these such complaints are minimal if at all.

What we do to avoid this complaint:

At PayMatters we process the majority of our payments from remittances (i.e. before funds are received) on Wednesday/Thursday. This ensures most people expecting a payment will have flagged a potential issue before Friday.

On Friday once all receipts have been allocated we inform all people that are being paid and request that anyone else who was expecting a payment gets in touch so this can be investigated.
We operate late opening on Fridays and are open Saturday mornings to ensure all late receipts or advances can processed.

We operate a 24 hour answering service to ensure any complaint can be received and actioned.

If you would like to give any feedback be it positive, a general review, suggestion for improvement or a PayMatters complaint then we would be happy to hear from you.
Please email our Operations Director at stewart.davis@paymatters.co.uk

Miles Grady BA (Economics) Hons ACA is a qualified Chartered Accountant and founding director of PayMatters and PayMatters Accountancy Services LLP (PAS).

PayMatters Limited (now Umbrella-Company Limited) is the Umbrella Company arm that offers compliant PAYE pay for contractors working in the UK while allowing the contractor (who becomaes a flexible employee of PayMatters) to be reimbrused any costs they incur providing their duties, tax free (normall travel to and from the end client and an allowance for subsistence during the day while at or travelling to the temporary workplace).

PAS (now Umbrella Accountants) provides accountancy services to contractors operating through their own limited companies. Services include up to date management information so the company owner knows the amount they have available to draw at any point in time. It is also includes the preperation and filing of yer end accounts and returns.

Prior to PayMatters Miles Grady was a director of Harrington Brooks between 1997 and 2010 and helped grow it into one of the largest debt solution businesses in the UK. Harrington Brooks has over 50,000 clients and 500 staff based in Sale, Manchester.

Miles has also worked at KPMG, TSB, Mazars and CIS Insurance.

Miles and Sarah Grady have 4 children and live in Macclesfield.

Contact Details for Miles Grady:
Telephone: 0800 121 6513
Email: miles.grady@umbrella.co.uk
Web:

If you are looking for an Umbrella Company in the UK then you have over 250 to choose from!

The good news is that all UK umbrella companies generally provide coverage for the whole of the UK.

So whether they are based in London, Birmingham or Manchester or if you are working in Glasgow, Edinburgh or Norwich it doesn’t matter.

UK Umbrella Companies are happy to discuss your requirements on the telephone and will email you pay illustrations, recommendations and contracts.

At umbrellacompany.tv we are linked to PayMatters Umbrella Company.

Paymatters are on the approved supplier lists of many of the UK’s largest recruitment agencies.

They are also accredited by the industry compliance experts Professional Passport.

To speak to PayMatters please call UK 0800 121 6513 or Visit their website: PayMatters UK Umbrella Company .

HMRC have confirmed that additional guidance is available in their manual: EIM05230 - Employment income: scale rate expenses: subsistence expenses: advisory benchmark scale rate payments

HMRC are keen that companies, their employees and HMRC are not wasting valuable time in unnecessary administration. HMRC therefore encourage employers to apply for the dispensation which then eliminates the requirement to collect receipts for all subsistence claims provided they are within the prescribed limits. Employees should only claim for actual amounts they have spent up to the maximum allowed.