News

15th February, 2012

On how many occasions have you been asked to prove your identity with financial institutions and professional advisors? In an age where we are becoming very used to these procedures perhaps we should take some time to consider how well we know those advisors.

A recent case, reported in the Telegraph, highlights the need for Contractors to really know the advisor they are appointing. Dave Upton, a contractor accountant, stole more than £250,000 from 33 contractor clients over a period of time by providing them his bank account details, instead of the taxman’s, when they came to pay corporation tax. Mr Upton now faces a 6 year jail sentence and a £495,000 confiscation order.

When choosing an advisor for your business consider their marketing material carefully, seek personal recommendations and better still meet your prospective accountant. OrangeGenie strongly believe in developing honest and open relationships with our contactors. We positively encourage that you meet with your dedicated accountant face to face to build those bonds that will allow us to provide you with an exceptional service that leaves you safe in the knowledge that your business is compliant whilst you concentrate on what you do best.

14th February, 2012.

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8th February, 2012

Oil and gas contractors look set to enjoy a buoyant 2012, as hiring returns to the UK sector following a difficult recession. Day rates for oil and gas contractors working in the North Sea are among the most competitive worldwide, with rates averaging £540-£900 a day.

The Oil & Gas Global Salary Guide 2012 also reports that contractor rates rose by 30% in 2011. Further rate increases are expected as the rapid recovery of the sector stimulates acute skills shortages, particularly in upstream disciplines as exploration and production activity ramps up significantly.

“Average oil and gas salaries in the UK are around 8% more than the worldwide average,” notes Duncan Freer, managing director of the guide’s co-author, Oil and Gas Job Search. “Greater activity is scheduled for 2012 and beyond following a difficult period during the recession.”

Matt Underhill, managing director of the guide’s other co-author, Hay’s Oil & Gas, is equally bullish: “Last year we reported a 30% rise in contractor wages for UK professionals. This was particularly encouraging for UK-based oil and gas professionals, as the rates are a good indicator of the state of the job market, being more reactive to short-term changes in demand for skills.”

The report, which includes detailed salary and contract data on 24 disciplines from over 50 countries, says that conflicting hiring trends are currently proving to be of benefit to contractors. Greater investment certainty is resulting in a larger proportion of permanent hires as companies gain the confidence to make long-term recruitment decisions.

However, contractors are being used in new regions and countries where the fluctuation in revenues from these markets can be matched to the flexibility resulting from hiring contractors. So the use of contractors has become more widespread compared to previous years.

Contractors can be found, and are in demand, across all core operating areas within the sector, including engineering, geoscience, drilling, construction and project controls. Over 45% of survey respondents confirmed plans to increase the use of contractors in 2012, and 37.2% had more than one in five of their workforce hired on a contract basis.

Freer concludes: “Despite some forecasts, many oil companies are continuing to invest in the North Sea, so it is a time to look forward with confidence.”

Published by ContractorCalculator

14th December 2011

An IT contractor has been handed an unprecedented yet unenviable verdict of both outside and inside IR35 at a single workplace - meaning he wasn't but then was a 'disguised employee', despite trading as a limited company for nearly two decades.

In ruling that John Spencer was outside IR35 for the first three years of a contract - though not the four subsequent years, a Bristol Tax Tribunal made the UNIX expert with a 17-year trading history the subject of IR35's first ever "split case".

"This is unprecedented as far as I'm aware," Paul Mason of Abbey Tax reflected to CUK yesterday. "I've not heard of a case like this because normally your status is your status; you're either one thing or the other but not both.

"However I can see sense in what the judge said [to Mr Spencer]: 'Up to a point you were doing specific bits of work and projects, after that point you were really no different to being a permanent employee.'"

Employment status advisor Kate Cottrell, seconded to the Office of Tax Simplification for the IR35 review agrees. "This case is indeed the first time we have ever had a split", the Bauer & Cottrell co-founder told CUK.

"It clearly highlights the need to consider IR35 for each and every contract, [at both] extension and renewal. I know of similar scenarios where there was an original project and then the same contractor was offered another role to cover for maternity leave.

"So our opinion [of that worker's employment status] was originally outside IR35, but the subsequent change [to their working reality] put them inside IR35, for that particular contract."

In Mr Spencer's case, lodged as an appeal to HMRC's demand that he pay £140,000 under IR35, the "precise point" at which the change in his employment status occurred "is not easy to define."

However the judgement adds, "at the end of December 2003 there were various indications that the relationship did then change," Judge Howard Nolan said, addressing Mr Spencer, his limited company JLJ Services Ltd and the end-user, Allianz.

"Our decision is accordingly that in the early period, prior to the end of 2003, Mr Spencer would not have been regarded as an employee, but that from the start of 2004 onwards, he would have been regarded as an employee."

Positively, then, for Mr Spencer - as he approaches his 67^th birthday, his seven-year liability under IR35, as alleged by HMRC, has been almost cut in half by the tribunal, prompting claims he snatched a 'partial' victory.

"[Generally speaking] I always think that the strongest argument against IR35 is Control," Mr Mason at Abbey Tax said. "This is simply because that's where you can really show that you are an independent [business].

"Indeed, the argument [that Mr Spencer won] for the earlier part of the contract was that it was for labour on discreet pieces of work; where he had more control."

The judgement is supportive. When at the workplace (Allianz's premises), JLJ's owner-manager did not 'clock in' as the organisation's employees were required to. Plus, there was "little intervention with the day-to-day work that Mr Spencer would then be doing."

Handed down in October, the judgement adds: "Obviously Allianz would enquire about progress, particularly if a project was over-running the expected period assigned for completion of the project.

"Furthermore, Allianz also said that it had the right, if some emergency arose, to require Mr Spencer to pause in work on a particular project if some other matter needed to be attended to first."

Another Control issue - whether Mr Spencer's work was subject to a 'quality control' process, did not prove to be a determining factor, partly owing to conflicting evidence from the worker and the client.

"Understandable" sympathised the judge but still, "nobody in the company [Allianz] would have had the detailed knowledge of Mr Spencer's field of expertise to judge whether in every respect he was tackling his projects in the best way."

Such a lack of control is "fine" when the worker is providing expert services (judgement point 23) - on a unique project (point 42), but not, explains Ms Cottrell, when "the engager needs work undertaken repeatedly, and when you are working generally within the organisation."

Given that the classic tests of employment status have not changed, and therefore remain as significantly determining as they were before the case, the advisor believes such a work pattern is the "main" warning contractors should heed.

Mr Mason agreed: "For a contractor, the central message being sent by the courts is that if you're going to engage over a long period, then you really need to be able to show that you're engaged on specific projects.

"[To be outside IR35 you can't] just basically get on with whatever work crops up [from the end-user]. Do that and you risk ending up becoming very much part and parcel of their organisation.

"So if you're not doing separately identifiable and discreet projects, then it's very easy over an extensive period to be perceived as part of the client's furniture. That's what happened here and to my mind, that's Mutuality of Obligation."

This personal distinction is necessary because the judge, who had not previously heard an IR35 case, said MOO, or 'mutuality of undertakings' as he called it, had "diminished importance" as one of the classic tests.

Language in the judgement, pertaining to the second part of Mr Spencer's duration at Allianz - the IR35-caught part, suggests otherwise.

"At the end of 2003, if not before, it became clear that Allianz wanted Mr Spencer's services permanently. It no longer engaged him for projects. It either offered him employment, or permanent engagement, and even if he rejected that, he was thereafter engaged on an annual basis," it says.

"In other words he became one of Allianz's key computer experts, available for work that was likely to be available indefinitely. He certainly ceased to be engaged just for identified projects.

"By breaking the link with projects, and indicating that Mr Spencer would work generally within the organisation, we consider that from 2004 onwards, there was more reality to Control."

Abbey Tax reflected: "From that moment onwards - the inside-IR35 period, to us the judge is effectively saying there was mutuality."

Two other tests run by the court, the right of Substitution and Undertaking 'one's own business,' found insufficient evidence to back Mr Spencer's claim that he was a independent contractor for his entire seven-year stint at Allianz, not just the initial three years.

That's despite him enjoying no pension, holiday or sick leave rights during his Allianz contract, sourced by recruitment firm Highams. He had no company car and although he did join an Allianz workers' car pool, he never drove.

Affectionately referred to the judge as likely to be "one of the early computer specialists" in the UK, the now-retired programmer was not reimbursed for his business travel costs, and even had to pay for his own Christmas lunch.

Taken from ContractorUK

23rd November, 2011

The Prime Minister has applauded the growth in the freelance community as new research reveals a 12 per cent increase in the number of people opting to become freelancers.

Figures released by Kingston University and freealncer group, the PCG for National Freelancers Day show that the number of freelancers in the UK now totals 1.56 million or one in 20 in the UK workforce. This is up from the previous figure of 1.4 million, revealed by the University’s initial study in 2008.

This comes in a week when the sector is marking National Freelancers Day November 23 2011 and freelancers were given an endorsement by the Prime Minister David Cameron who said: "I have a huge respect for all those who make the brave decision to branch out on their own and take control over the way they work.

"This Government recognises the valuable contribution that freelancers make to the economy and, as more and more people choose to join your ranks, you have all our support.”

Flexible
Within the sector the survey reveals that the highest proportion of freelancers work in arts, literary and media occupations (265,000), followed by management (161,000), then teaching/education (110,000), with IT/Telecommunications (93,000) rounding off the top four.

PCG’s Managing Director John Brazier said:“The figures underline the steady growth in the sector in turbulent times, and confirm a widely held belief that more and more skilled and talented individuals are opting for freelancing as a work/lifestyle choice, or because of economic circumstances. Freelancers are offering industry and commerce a flexible talent stream when and where it is needed.”

Notably the research also flagged the rise of the ‘mumpreneurs’ as the 2011 figures show a 25 per cent rise in the number of working mums turning to freelancing. Around 210,000 working mums have chosen the freelance path against 167,000 in 2008. This is equivalent to one in 8 freelancers being a working mother.

The full research, including a breakdown of strong and weak sectors is under intense analysis and the final report will be released later this year.


Article taken from www.shout99.com

9th November, 2011

We have become aware of a scam which is targetting newly formed companies. An official looking document appears to come from "Intracom VAT Registry" in Brussels advising that you need to register for EU VAT at a cost of £320.

This is a scam and you should ignore this document.

We will discuss with you the need to be VAT Registered and will make the necessary application for you with HMRC. There is no charge to be VAT Registered.

31st October, 2011

A recent report by HMRC suggests that there has been a 300% increase in fraudulent emails alleging to be from the revenue. A common theme appears to be a request for the users bank details, in order for a "tax rebate" to be paid.

If you have doubts regarding the legitimacy of any communication you receive, please contact HMRC or your OrangeGenie Client Accountant.

10th October, 2011

31 October: all paper returns

If you send a paper tax return it must reach HMRC by midnight on 31 October.

You only have longer than this if you received the letter, telling you to send a tax return, after 31 July. In this case you'll have three months from the date you received that letter.

31 January: online returns

Your online tax return must reach HMRC by midnight on 31 January.

You only have longer than this if you received the letter, telling you to send a tax return, after 31 October. In this case you'll have three months from the date you received that letter.

There's an earlier deadline of 30 December if you want HMRC to collect any tax you owe through your tax code. You now can ask for this if you owe less than £3,000. Please show this clearly on your tax return. HMRC will try to collect the tax due through your code, but they can't always do so.