Tag Archive | "employment"

Jeremy Corbyn Talks Self Employment

While speaking at the recent Labour Party Conference, Jeremy Corbyn touched on a number of subjects regarding self employment.

Obviously we’ve heard quite a bit recently from the Prime Minister and Chancellor regarding issues of self employment, so it’s always interesting to hear what the leader of the opposition has to say.

While many people doubt Mr Corbyn or Labour will come to power any time soon, they still have influence when it comes to making new laws within the government, and this is why every contractor out there should be at least a bit interested in the following points that were made.

Starting off his speech Mr Corbyn came straight out with the quote…”self-employed value independence.”

While I don’t agree with the Labour leader on many things, this is one thing I would back him up on, because at the end of the day the reason why many people get into the contracting lifestyle is because they want more freedom to choice how they work and spend their day. So it’s good that Jeremy Corbyn recognises this.

He then went on to talk about the subject of bogus self-employment where companies are basically pushing people to become self-employed even though they should technically be employed and have all the rights associated with that such as minimum wage and holiday pay.

For me, this is not a straight forward subject, mainly because there are many situations where someone is better off being classified as self-employed rather than an employee.

They can make more money and have more freedom, rather than being held back by a wage and rules set out by a boss.

Granted, this isn’t for everybody, I just think there are many times where self-employment is the right status, and there is no need to launch these legal challenges trying to change that status, because ultimately it might not be in the workers best interests.

Another topic that Mr Corbyn went on to speak about is the need for more education about pension schemes for the self-employed.

This I agree with 100%, as there are just too many people in the UK right now, especially freelancers, who don’t have any kind of pension they are putting money away for.

Is the government state pension going to be enough for you? Probably not, and this is why more should be done to make sure suitable pension schemes become more accessible and easier to understand for for everyone.

No matter what you think about the Labour Party, it’s worth noting that Mr Corbyn at least acknowledges some of the problems facing the self-employed and contractors today. For that he should be congratulated.

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Contractors to Leave the Public Sector Due to Tax Changes

The IPSE have warned that key contractors will leave the public sector if the government continue with proposed tax changes this year.

Basically, up until now it has been down to the contractors themselves to determine if they have the correct employment status, and this only gets questioned if the Inland Revenue has reason to believe it might be wrong.

With the new changes it will be up to public sector employers to decide the employment status of a contractor, which means they become responsible for putting on employment taxes. Not only that, but it also takes away a lot of control from the contractors themselves, as they could could find themselves labelled as an employee rather than self employed.

In short, things are going to become a lot more confusing for both employers and contractors, and it will no doubt just lead to more paperwork and time wasted phoning up places where they put you on hold for 45 minutes.

When you consider all of this, it’s easy to see why the IPSE are predicting that contractors will leave the public sector in their droves and start looking elsewhere for work. Why continue in a sector that just wants to hold you down, when there are so many other industries out there that are new and dynamic? The choice is going to be clear for thousands of people.

You can be sure the government didn’t think of this when they were sitting around and planning things out. That is the problem with many of these new initiatives…they fail to see the bigger picture.

No doubt the initial goal of all this is to save money for the government, but in the long run they may end up losing money as they find it hard to fill jobs in the public sector.

Actually, it wouldn’t surprise me if the government do a complete U-turn once they see just how many people start to quit. It wouldn’t be the first time they have backtracked on a new policy.

Sure, these kind of things seem like a good idea when you are sitting around in a meeting room in a nice building in the centre of London, but then it gets implemented in the real world and soon becomes apparent that they got it completely wrong.

Who knows though. Maybe the IPSE are off the mark in their predictions, and perhaps the new changes will be a good thing for the public sector. I highly doubt it, but let’s wait to see what happens.

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West Midlands Leads the Way in Self Employment

Figures released by the government show the West Midlands is right at the forefront of the self employment revolution.

Since 2008, 35,000 workers have become self employed in the region, which means that by the beginning of 2016 that amounted to a total of 131,000 self employed workers.

Of course, many of the people in these figures are contractors and freelancers, which just goes to show how popular the industry is becoming.

When you add that many self employed people can work the majority of time at home from their laptop, then it’s easy to see why thousands around the West Midlands are going out on their own.

I think the government needs to be congratulated about these figure. Why? Because they have always led the push for more self employment in areas such as the Midlands, giving people incentives to go out on their own, and even offering benefits for those first few months which can be challenging

Now don’t get me wrong, I don’t think for a minute that a “benefit culture” is a good thing, but if it can help some people start a business or adapt to the contractor lifestyle for a month or two, then it can be very beneficial, just as long as people don’t start to try and game the system.

At the end of the day, if someone has a proven business plan and the energy and focus to make it happen, then why not get some incentives from the government to make it happen. Far more better than putting barriers in the way of people becoming self employed or just looking to tax them at every available opportunity, to the point where it makes no sense to work for yourself.

In this post Brexit economy we need entrepreneurs more than ever before, so that we are able to get back to a position of strength and then compete in the European markets once again.

Where exactly in the West Midlands is all of this self employment? Solihull and Walsall have the most according to the figures, with 9.6% and 7.8% for both of them.

Quite surprisingly, the city of Birmingham only had 7.6%, which means it came in at third on the table for the West Midlands.

Personally I expected it to be higher, especially when you consider the amount of people that live in Birmingham. I’m sure they can do more over the next 10 years though, in order to claim that number 1 position.

All in all these are good signs for the UK economy, and if other areas of the country follow suit then we have a lot to be excited about.

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More Contractors Moving Towards “Gig Economy”

Thanks to digital sites and platforms, many contractors are choosing to do so called gigs rather than traditional freelance contract work.

Take someone like Ying Li Looi-Garman for example. She is a freelance video producer from Singapore, who finds multiple jobs every month on a gig site that makes up the majority of her schedule.

Millions of people around the world are doing the same, with many freelancers in the UK starting to get in on the act.

It doesn’t surprise me at all to be honest. Let’s face it, over the last 10 years a whole world of new opportunities has been opened up thanks to the internet, and it seems that in the last few years freelancers have been taking advantage of that.

It’s good for businesses of course. Instead of having to sign-up people with monthly, or even yearly contracts, they can simply visit a gig site, find someone who has the kind of skills they are looking for, and then pay once the job has been completed. It really couldn’t be simpler.

At the end of the day, it is all about flexibility don’t you think? Freelancers get the flexibility to set their own hours and choose the jobs that suit them without having to sign any kind of contracts, while at the same time business owners are experiencing the same kind of benefits.

If it works for both parties then I think we are going to be seeing a lot more of this “gig economy” in the future.

It seems not everybody is convinced about this new way of doing things. For example, the Recruitment and Employment Confederation released a new report recently that highlighted how more more should be done to put gig workers in the same bracket as other self employed traders, in order to protect their rights and ensure a fair and safe economy.

The report then went on to talk in length about how gig workers may end up becoming “exploited workers, who are self-employed in name only” which could end up taking a lot of power away from the freelance community.

Of course, there is pros and cons to any kind of new way of doing things. Nothing will ever be perfect. Ultimately though, my opinion is that if these gigs offer freelancers more freedom and choice, then it’s something that will continue to get more popular with each passing year.

It’s not ideal for every kind of freelancer or industry however, and the old way of doing things will remain strong among thousands of businesses and contractors in the UK, of that we can be sure.

If you are a freelancer then the best way forward is to enjoy both worlds if you can, and see which one suits you best.

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Switzerland now classes as an EU state for Social Security purposes

It’s possible that accountants for contractors might have some clients who work in Switzerland. They should therefore be aware that HMRC now treats Switzerland as an EU member state for the purposes of Social Security.

The new rules came into force on the first of April 2012 and apply to anyone who goes to work or live in Switzerland. It will depend on your employment circumstances whether you continue paying UK NICs or pay the Swiss equivalent instead. Swiss employers with UK based staff might also have to pay UK employers’ national insurance contributions.

The new regulations also apply to freelancers and other self-employed people who move between Switzerland and the UK.

Transitional arrangements have been put in place to deal with circumstances where the new rules change the nation that affected individuals pay their contributions to. Under these arrangements it may be possible to continue paying as you were until your circumstances change.

HMRC has advised people who are unsure of how these new regulations will affect them to contact it for advice.

The new rules are similar to those introduced in May 2010 to cover workers who move around the EEA. The UK had originally opted out of the Treaty of Amsterdam and said it would not apply the rules to people coming from or going to Iceland, Norway, Switzerland and Liechtenstein.

The Revenue’s website will soon be updated to reflect the new guidance but in the interim people can phone the NIC&EO International Caseworker helpline on 0845 915 4811 if they need advice.

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Image: Biel/Bienne, Switzerland by nikoretro

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Generation Y accountants want better work-life balance

Despite high levels of unemployment, Generation Y accountants are optimistic about their future prospects and eager to grasp the varied career opportunities the accountancy profession has to offer.

These young, fresh accountants have high expectations of what the employment experience will provide for them. Gone are the days of being exceedingly “grateful” for the chance to work at a particular firm, they now see work as a two-way street, that provides benefits for both employer and employee.

Last year a joint publication from the ACCA and Mercer, an HR consultancy, described Generation Y as the “über confident generation”, who whilst valuing security are more than prepared to walk away if things are not going according to plan.

Generation Y: Realising the Potential claimed that today’s graduates demand more from employers. They are looking for dynamic careers and many want to use the accountancy training they have received in the broader world of business. 21st century finance professionals have a clear and confident vision of the way their career will progress; they are motivated by money but also want job security.

Employers will still have to pay well to attract good talent but Generation Y candidates also want a good work-life balance and to work for a brand that fits in with their own values.

ACCA UK head Andrew Leck said flexibility is all important to today’s graduates. They want to know where they can go with their qualification. Mobility will have a key role to play when it comes to choosing their career and they feel that changing employers will provide them with broader experience.

© 2012 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Like Father Like Daughter by Andrew Stawarz

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SMEs display pessimism about hiring intentions this year

The results of a recent survey of SME owners on their hiring intentions for 2012 provides a disturbing outlook for 2012.

1,000 SMEs were questioned by Huddlebuy, the discount site, and two thirds of them said they are not planning to employ any new staff this year.

Job seekers in the North of England, the Midlands, Scotland and Wales will find it extremely difficult to find work as 70% of small businesses said they would be unlikely to employ new staff in 2012. In the south, 60% of SMEs are not planning to increase their headcount this year.

Economists expect unemployment to increase significantly over the coming months and could reach 2.9 million by the summer. The public sector is making redundancies twice as quickly as originally predicted and the private sector is unable to create enough jobs to absorb them.

The biggest concern amongst business leaders is the UKs youth unemployment rate, which is currently standing at 22%. This is expected to rise further as business confidence falls and the number of entry-level vacancies drops.

The deputy director-general of the CBI, Neil Bentley, said action is needed now to prevent a lost generation of youngsters. The government’s £1 billion youth contract will create apprenticeships and placements but more still needs to be done.

The MD of Pertemps recruitment, Carmen Watson, said training providers should focus on getting young people ready for work and into appropriate roles. Employers also have a role to play and they should ensure new employees receive the mentorship they need to get used to a new working environment.

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Would PAYE Pooling benefit small businesses?

Accountants may be interested to know that HMRC is considering changing the PAYE system so that employers who are closely connected can be treated as a single entity for the purposes of PAYE. If such a move were implemented, it would reduce both costs and processing time.

HMRC has now issued a consultation document that discusses how PAYE Pooling might operate and requesting feedback from interested parties. The scheme would be optional and organisations would be able to decide whether they wanted to come under a pool reference of several employers.

The new pool reference would cover all employee tax records, and the Revenue would treat the pool of companies as a single entity for PAYE. Moving to a ‘PAYE pool’ would not have any direct affect on an organisation’s employees. They would still retain the same employer and their employment contracts should remain the same.

HMRC has not published its definition of ‘connected employers’ in the context of PAYE Pooling, but a spokesperson for the Revenue said it expects to be able to apply different criteria for public bodies and private businesses. As far as private entities go, HMRC will be seeking some commonality in ownership and business, whilst for public sector bodies it would be looking for those that were grouped together under a particular health authority or local council.

The Revenue has also made it clear that payroll agents would not be eligible to join the new system.

The PAYE Pooling consultation runs until the 15th of December.

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Contractor accountants feel burdened down by red tape

The British Chamber of Commerce claims that limited company contractor accountants and other small business owners are being weighed down by the burden of red tape.

80% of small businesses have now had to resort to external expertise to help them comply with the UK’s complex employment regulations.

The BCC’s director-general, John Longworth, said that although the coalition is improving the tribunal system, the implementation of Agency Workers Regulations, along with changes to pensions and parental rights present additional bureaucracy for business owners to contend with. He went on to explain that more jobs will be created if the employment market is flexible and the government should be reducing red tape not adding to it.

The government is considered changing reporting requirements for SMEs that could save them millions in accountancy fees.

Under the proposals, small businesses will be able to decide whether they wish to have their accounts audited. The minister for corporate governance, Edward Davey, said that many companies find audit valuable but as it costs around £10,000 to perform, removing the obligation would help them, and the economy, grow.

In order to qualify for the audit exemption, small businesses would need to meet two out of the following three criteria. Their turnover must not exceed £5.6 million, their balance sheet must be under £3.26 million and they must employ no more than 50 staff. The government has estimated this proposal could save small businesses £206 million per year.

Furthermore, the coalition intends to exempt the majority of subsidiary companies from a mandatory audit providing their debts are guaranteed by the parent company. This move would save a further £406 million every year.

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Home workers have an increased sense of honesty

A new study by the Ethisphere Institute and Jones Lang LaSalle has discovered that businesses that allow staff to work from home will benefit from increased employee honesty.

The two companies researched more than 200 firms, including contractor accountants, and 68% of them said they did allow employees to work remotely. When it comes to breaking rules, 11% of home workers were found to have been guilty, but this rose to 36% of office-based employees.

Mark Ohringer, the executive VP of Jones Lang LaSalle, said it’s easy to see why home based workers do not get embroiled in some of the distractions that cause trouble in the workplace.

It has been suggested that the responsibility that comes with working from home leads many people to become more security conscious and maintain a higher standard of honesty and discretion.

The CIPD’s employee relations adviser, Mike Emmott, recently said that working from home can bring many benefits to firms and provide them with a competitive edge.

However, XpertHR has warned that small businesses that let employees work from home must still take heed of their health and safety obligations.

Bar Huberman, the employment law editor for XpertHR, explained that it was a myth that companies are not responsible for the health and safety of their home-based employees. People working from home have nearly the same protection by law as those who work in an employers’ premises. Employers still need to ensure that the home workplace complies with health and safety regulations.

Huberman made her comments after it was disclosed that tens of thousands of workers in London will work from home when the Olympics are in progress to avoid congesting the transport network.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

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Employers may still be able to make compulsory retirements

Research by the Employment Law Advisory Services has discovered that more than 50% of SMEs, including accountants for contractors, are not prepared for the abolition of the default retirement age.

From the 1st of October this year, employers will not be allowed to make workers retire when they reach the age of 65.

The majority of firms are aware that the rule is about to change but a lot of them are still struggling with the application of the rules. Peter Mooney, the head of employment law at ELAS, said many firms haven’t thought through how they will be affected by the new law.

Businesses employing older workers could have to pay for expensive healthcare and death-in-service benefits and adjustments for disabilities, access requirements and risk assessments may need revising to suit the ageing workforce.

However, age campaigners claim that employers may be able to make compulsory retirements to keep costs down, after a recent ruling in the European Court of Justice.

The case concerned a German state prosecutor, Gerhard Fuchs, who was forced to retire when he reached 65. He was employed by the German state of Hessen, and compulsory retirement was part of a cost-saving policy. The ECJ ruled in the employer’s favour saying the need to keep costs down could be seen as justification for a compulsory retirement age.

Chris Ball, from The Age and Employment Network, explained that although the government has abolished the default retirement age, the ECJ has provided employers with “wriggle room” to justify compulsory retirements.

He went on to say that the ruling appears to mean that a compulsory retirement age can be justified in order to promote a younger workforce. Controversially, it also suggests it is legal to retire older member of staff to stop possible disputes about employees’ fitness to continue working once they reach a certain age. This could throw the door open for employers to retire older workers off early.

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Is the new statutory residency test really straightforward?

Non-domicile clients of contractor accountants might know that their tax status has been causing confusion over recent years and the government has now announced its plan to make the system simpler to understand.

According to the Treasury, the current rules surrounding residency are complicated, vague and subjective so it is going to introduce a straightforward statutory residence test.

The framework for the STR test will take into consideration the length of time spent in the UK as well as other connections to the country. It also lays down a distinction between ‘arrivers’, people who have not been resident in the past three years, and ‘leavers’ who were resident during at least one of the past three tax years.

Non-residents will be people who spend less than 10 days per year in the UK, or work abroad full time. Anyone who has been classed as a non-resident for the past three tax years will continue to be classed as such providing they spend less than 45 days in this country during the current tax year.

A definite resident is somebody who spends more than 183 days per year in this country or whose only home is situated in the UK.

Obviously a large number of people will not fall into either of the above categories and their status will be decided based on four factors. These are: having a family resident in this country, substantive UK employment, accommodation they can access in the UK and whether they have spent 90 days or more in Britain in either of the preceding two tax years.

To complicate matters slightly, the amount of factors taken into consideration will depend on the length of time people spend in this country in the current tax year.

PwC’s international mobility partner, Sean Drury, says the 10 day rule is extremely restrictive and says clear exemptions are needed for thinks like visiting ageing or sick family members.

A tax expert from PKF warned that the complicated connection factors sounded like a recipe for disaster and he predicted court cases would ensue to determine the precise workings.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

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Employment statistics contain a glimmer of hope

The latest employment statistics released by the ONS last week should bring a crumb of comfort to Britain’s younger generation.

895,000 young people were registered as unemployed between February and April this year, the lowest number since April 2009. Unemployment across all age groups also dropped to 2.43 million.

Kevin Green, the chief executive of the REC, said the reduction will be welcomed but warned that this could be the calm before the storm. Ten of thousands of young people will be leaving full-time education in the next few months and a large proportion of them will not have a job waiting for them.

The picture looks mixed for those in the 50-64 age bracket. 36,000 more people in this age group joined the working populous but the number claiming Jobseeker’s Allowance also increased and this group also has the highest proportion of people who are long-term unemployed; i.e. without a job for more than 12 months.

Meanwhile, prospects are improving in the City. The MD of Marks Sattin, Dave Way, said there has been a visible boost in middle tier employment amongst the 35 – 49 age group in City firms and finance and accountancy workers are confident they will receive a salary increase in excess of 8% this year.

The director for employment at the CBI, Neil Carberry, said the private sector seems to be creating jobs and he hopes this trend will continue. However, long-term unemployment is still a serious problem and the government must tackle the structural causes of this in order to get the UK working.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

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90% of Britains think the economy is in a bad state

Only 10% of people in Britain think the economy is good, ranking us amongst the gloomiest nations in the world, according to a new survey.

24 of the world’s largest economies were polled and it transpired that Japanese and Hungarian citizens were the only nationalities that were more negative than us. And the Japanese have a good excuse after suffering the massive earthquake and tsunami earlier this year.

In contrast, at least 70% of citizens in Australia, China, India, Saudi Arabia and Sweden think their country’s economy is good.

The majority of us can’t see a light at the end of the tunnel either. Only 10% expect the economy to strengthen over the next six months.

The survey was conducted by Ipsos MORI and its MD, Bobby Duffy, said the level of gloom was understandable. We have absurd house prices and the cost of living is rising a lot faster than earnings. It is not surprising that people feel pessimistic and this will impact growth.

It’s not only the man in the street who feels less than happy about the state of the British economy. The BCC has now downgraded its expectations for growth for this year and next.

The Chamber has knocked 0.1 percentage points off its GDP forecasts and at the same time increased the forecasts for annual CPI inflation.

In slightly better news, the organisation now expects just 2.6 million people to be unemployed 15 months from now, instead of the 2.65 million it predicted 3 months ago.

The director general of the BCC, David Frost, said the economy still faces difficult challenges. However, he believes the coalition is right to continue with its plans to reduce the budget deficit. But, the government must also come up with policies that enable businesses to drive the recovery, he added.

© 2011 All rights reserved. Reproduction in whole or in part without permission is prohibited.

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