Contracting Still On The Rise
Despite the doom and gloom in the British economy including what appears to be ever increasing unemployment figures it’s good to see that the number of contractor opportunities is holding up well. It does beg the question though, what makes offering a contract so appealing versus traditional employment?
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Still Plenty Of Work For IT Contractors?
Despite the ongoing slothness of the UK economy and recent surveys which have shown that expected expenditure on capital projects being way down there appears to still be plenty of work available for IT contractors. I know from personal experience that my friends have not had any trouble finding new contracts over the past 12-18 months.
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Is The Financial Services Market Recovering?
The financial services sector was particularly hit hard during the recent recession. Not a big surprise really considering the almost total collapse of the banking sector! Recruitment was on a very tight leash throughout 2008 and 2009 with 2010 fairing only a little better towards the end. It would seem that in 2011 however most experts are predicting a return to better times and the prospects for contractors willing to be flexible, in the financial services market are looking much better.
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Are You Involved With The Olympics?
As the preparations for the 2012 London Olympics draw to a close it looks like there could be a jobs bonus for IT contractors and IT specialists in general. One recruitment company has estimated that up to 5000 jobs in total could be created and a number of these will be technical roles. Positions will be created as the wheels are put in motion for the telecommunications infrastructure to be put in place to allow capacity for the surge in use that will coincide with the Olympics. As with any major 21st Century event there are certain expectations for not only those competing but also the media and spectators. One can only imagine the amount of bandwidth that will be used to cover the Olympics in London!
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IT Contractor Payroll
Of all the contractor groups currently operating in the UK it seems as though the IT contractor has been keenest on sourcing the right payroll solution. Many IT contractor payroll solutions have sprung up over the years in order to service this need, few have lasted the sands of time. One thing is certain though and that is most IT contractors seem to prefer the option of having somebody manage their payroll for them as opposed to forming their own limited company. These are just some of the payroll options that have been available:-
1. The Offshore Partnership. Based around double taxation legislation that permitted offshore companies to handle your payroll in a very efficient way. These schemes have all now been closed due to updated HMRC legislation.
2. Employee Benefit Trusts. Perhaps the most controversial payroll scheme to date for IT contractors. HMRC insist these are no longer compliant yet many scheme providers insist they are. Several providers have been investigated by HMRC. (Please see here for a tax efficient alternative to the EBT.)
3. Umbrella Company. A payroll solution that gives you the full statutory benefits of being a PAYE employee. Of course on the downside it is the most expensive payroll solution for IT contractors. The main benefit of an umbrella company is that it removes the burdens of running your own company.
4. Invoice Only (Gross Pay). Designed for contractors who are registered as self employed. An invoice only scheme gives you the ability to remain completely in control of your finances ensuring that all payments due to you are received gross. It’s then up to you to manage your own tax affairs. The main benefit for self employed contractors is that it removes the burdens of invoicing and chasing payment plus other administrative tasks.
There are several other solutions but the providers tend to be very shy on revealing the practicalities involved! If you’re currently an IT contractor operating in the UK and are stuck for a solution please feel free to use the contact form at the top of the page and we’ll do our best to put you in contact with a suitable payroll provider.
Working As A Locum, Don’t Forget To Invoice!
Whilst there are many advantages to locum work (flexibility, above average hourly rates etc etc) you have to remember that you are in effect working for yourself. This comes with responsibilities!
I just know that this is going to ring true with the finance staff of health authorities all over the UK and it has to be said. YOU ARE NOT AN EMPLOYEE OF THE HEALTH AUTHORITY, IN ORDER TO BE PAID YOU MUST PROVIDE AN INVOICE FOR YOUR SERVICES! You may see it as unimportant paper shuffling getting in the way but this is how the world works, you want paying then you need to provide a suitably authorised invoice for payment. I have plenty of first hand experience of this and it used to drive me mad. Phone call from locum :-
Locum – “I haven’t any money this month”
Finance Office – “Have you submitted an invoice for payment”
Locum – “No, I mean err…..can I get a cheque today?”
It either goes 2 ways, all financial regulations get by-passed as a rushed payment is processed leaving staff open to all sorts of audit problems (not to mention tax payers out of pocket) or the locum just doesn’t get paid. Either way it is a problem of your own causing.
You are not an employee and will not be paid as part of the monthly salary run. Either you or the agency you are working for must submit an invoice which can then be processed as any other invoice through the creditors department. It is not the responsibility of government employees to raise your invoice for you, provide templates or anything else. Your agency will do this for you on you submitting your time sheet should you be working for an agency but otherwise the responsibility is firmly on your own shoulders. You are working for yourself, to get paid you must invoice.
CIS – New Scheme
CIS – New Scheme
The new CIS scheme sets out the rules for how payments to subcontractors for construction work must be handled by contractors in the construction industry (hence Construction Industry Scheme).
Under the new scheme, all payments made from contractors to subcontractors must take account of the subcontractor’s tax status as determined by HM Revenue & Customs. This may require the contractor to make a deduction, which they then pay to us, from that part of the payment that does not represent the cost of materials incurred by the subcontractor.
As of 6 April 2007 a New Construction Industry Scheme started. Its aims are:
1. to reduce the regulatory burden of the Scheme on construction businesses
2. to improve the level of compliance by construction businesses with their tax obligations
3. to help construction businesses to get the employment status of their workers right.
CIS New Scheme Commencement Date
The commencement date for the new Construction Industry Scheme was 6 April 2007. The deduction rates for the new scheme are 20% for subcontractors registered with HMRC for payment under deduction and 30% for those not registered.
Benefits Of Being A Locum
The Benefits Of Being A Locum In The UK
As a medical professional setting yourself up self employed as a locum has many benefits:-
Locum work is well paid and can be a great way of topping up your salary.
It is a great way of experiencing different places of work.
Can be used to check out an area to see if it is suitable for a permanent position.
The temporary nature of locum works tends to mean that the work is less stressful than that of a full time employee.
You have greater flexibility and freedom when it comes to how you want to work.
In order to find work as a Locum in the UK there are a great many locum agencies that will assign you contracts, alternatively you may choose to circulate your CV and do the hard work yourself. The major downside of being a locum through an agency is that it does remove some of the flexibility.
Benefits Of IT Contracting
Benefits IT Contracting In The UK
Just the number of IT professionals that choose to contract rather than work as employees in the UK tells you something, it tells you that being a UK IT Contractor has many benefits over the traditional role of employee for a company!
Greater Pay
In the IT sector in particular the pay differences between contracted work and salaried work can be enormous, the average being two to three times the hourly rate of non contractors.
Greater Choice
Being a contractor allows you to decide on the type of tasks you wish to undertake, if you don’t like what a contract involves then you don’t take that contract. As an IT employee it is not unusual for you to end up also being the person who fixes the chairs, repairs the photocopier and many other “technology” related tasks. Contracting allows IT professionals to choose the work they want to do and be more valued in the process.
Better Knowledge
In the ever changing world of information technology it is essential for the modern professional to be able to learn new skills. In a traditional role within a company many IT staff are stuck doing the same job(s) for years on end and never need or want to learn. Contracting requires that you can offer the skills that are most in demand, this benefits your clients and ensures that most contractors are much more flexible with their knowledge than other IT professionals.
Greater Flexibility
As a self employed UK IT Contractor paid holidays are out but on the other hand by working for yourself you have much greater flexibility when it comes to taking time off. For contractors with family commitments the ability to earn large amounts of money in short spaces of time means that the flexibility is there to enjoy more family time. For many others it is not unusual to work 6 months on and 6 months off. You always have the flexibility to not accept a contract if you’re not actively looking for work.
Retain 84% Or Better Of Your Contract Value
Starting a new contract and looking for a new payroll provider? There is a solution available that has been in operation and in full compliance for 15 years, allows you to retain a minimum of 84% of your contract value and has many more benefits!
Click Here to find out more
Or simply call 0844 567 5657 quoting reference PB2.
