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IT workers benefit from increase in contracts
Whilst the UK public sector continues to cut jobs and cancel projects, more work is being made available to private sector workers. With IT projects making up most of the public sector cuts there is more demand for highly skilled IT workers who can take on short projects or contracts in order to help the public sector to move forward. Due to this demand, a lot of companies are finding that IT workers are changing roles more often and moving from project to project. This has obviously led to more workers becoming contractors or freelancers, and so instead of being directly employed by a single company they work through a limited or umbrella company and chose the contracts that they want.
Whilst this has led to some frustration from IT directors who are losing staff, their policy of simply increasing IT workers pay is wide of the mark. The top level IT contractors enjoy moving to new projects in order to push themselves and bring their skills up to date.
The increasing movement of IT workers between companies can cause problems for employers, particularly as it is not just the contractors, who are on short term contracts, that are moving, but also a larger number of permanent staff. Many of these staff have realised that as well as potentially earning a larger salary working freelance, they will also be able to benefit from the freedom to choose the projects that they want to work on.
Permanent workers can find out about the contracting options available to them by speaking to a contractor accountant. Not only will they be able to discuss the various set up and payment options but they will also be able to use resources like a self employed tax calculator which will help to work out the most tax efficient way of working. Contractor accountants can also advice on various employment laws such as IR35, which have been a burden to the freelance workforce in recent years.
HMRC Inefficiency an area for improvement
HM Revenues and Customs have received criticism from a number of groups and individuals, particularly over the last 12 months, over the way they operate, with much of the complaints coming due to the inefficiency and poor operation of the government body. This led to calls for HMRC to improve the way they run and their wasteful costs.
Towards the end of last year the government announced that they would be looking to improve their approach to tax policy making; specifically the way in which tax policy is developed, communicated and legislated. This was part of a finance bill which also saw plans to improve the HMRC controlled PAYE system, with a real time payment system proposed which would see the accuracy of payments enhanced, as well as reducing the costs of HMRC administration.
These plans received positive comments from the President of the Chartered Institute of Taxation, the leading UK taxation body. CIOT President Vincent Oratore welcomed the suggestions and said that they show the government is willing to listen to concerns and suggestions from tax professionals, and he hopes that any changes can produce a more efficient tax system. There were, however, worries from the Freelancer & Contractor Services Association (FCSA) that this could cause major problems, with huge amounts of data at risk as well as incuring extra costs.
Highly skilled contractors who want to avoid some of the complications of government tax policy can use a tax calculator to discover how much money they could make operating through a limited or umbrella company, compared to going through PAYE. A contractor calculator can be a useful resource for temporary and freelance workers who are looking for the most efficient system to increase the amount of their net income that they take home every month. Specialist contractor accountants, such as Independent Contractor Services, can offer a range of resources on top of expert advice for workers who are interested in working as a contractor.
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