Well today will bring some interesting times once again for the contracting industry, no doubt! Contractors working through umbrella companies took a battering last April with the introduction of the Travel & Subsistence Legislation and it appears that there will be no such let up for contractors once again with the introduction of the Apprenticeship Levy and the IR35 changes to the Public Sector.
So after much campaigning, shouting and screaming to HMRC & MPs, CU have had written confirmation that the Apprenticeship Levy will be applied to the payroll figure for EVERY employer, with NO exemptions! This will have significant knock-on effects in the industry, CU approached the relevant people to campaign against the changes or to look for an exemption as their payroll figure is not a true representation of the profit made by the company, but to no avail. A letter received this morning by the Rt Hon Robert Halfon MP stated that it would be possible to set a "fee" to reflect these costs! So in simple terms, they perceive that once again the contractor will have to stomach these financial changes, which will be reflected in their reduced take-home pay. In reality, it would have been the end client taking on board these costs if they were permanently employed, but whether they will consider increased rates to cover the additional 0.5% is yet to be seen!
For a government that relies so heavily on contractors, these changes seem to be made with no consideration to the value the temporary workforce that they readily employ on contracts.
If you read the notes accompanying the Finance Act 2016 issued by the AAT, it is being suggested that the Apprenticeship Levy is also to be applied to Public Sector PSCs, on the basis that this would probably be due if they had been employed directly.
They say it never rains but it pours... when will they finally recognise the skills that the contracting world offer and reward them appropriately?
So after much campaigning, shouting and screaming to HMRC & MPs, CU have had written confirmation that the Apprenticeship Levy will be applied to the payroll figure for EVERY employer, with NO exemptions! This will have significant knock-on effects in the industry, CU approached the relevant people to campaign against the changes or to look for an exemption as their payroll figure is not a true representation of the profit made by the company, but to no avail. A letter received this morning by the Rt Hon Robert Halfon MP stated that it would be possible to set a "fee" to reflect these costs! So in simple terms, they perceive that once again the contractor will have to stomach these financial changes, which will be reflected in their reduced take-home pay. In reality, it would have been the end client taking on board these costs if they were permanently employed, but whether they will consider increased rates to cover the additional 0.5% is yet to be seen!
For a government that relies so heavily on contractors, these changes seem to be made with no consideration to the value the temporary workforce that they readily employ on contracts.
If you read the notes accompanying the Finance Act 2016 issued by the AAT, it is being suggested that the Apprenticeship Levy is also to be applied to Public Sector PSCs, on the basis that this would probably be due if they had been employed directly.
They say it never rains but it pours... when will they finally recognise the skills that the contracting world offer and reward them appropriately?
#wishfulthinking
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