Our mission has always been to provide reliable, transparent, and factual information to support umbrella companies, recruitment agencies, contractors, and freelancers. To see our content consistently referenced—even if sometimes over-enthusiastically summarised—shows we’re delivering on that goal. It’s rewarding to know that FCSA is viewed as the gold standard in an industry that thrives on compliance and professionalism.

That said, we can’t help but notice that not all reporting of what’s on our website reflects our high standards. In fact, some interpretations of our updates feel more like creative writing exercises than fact-based reporting. And while we understand the temptation to interpret, embellish, or even spin, we’d gently remind everyone that accuracy is king. Nobody wants to find themselves straying into libel territory, after all!

At FCSA, the team here takes great care in ensuring our information is clear, comprehensive, and useful for everyone—from contractors seeking reputable umbrella companies, to recruiters looking to partner with an umbrella, to industry insiders needing reliable guidance. So, whether you’re using our website for insights, updates, or most-likely inspiration, FCSA is keeping the tide rising.

To our readers, competitors, and industry watchers alike: thank you for the attention—it keeps us sharp. And to those who might occasionally misinterpret our updates, don’t be shy! Reach out. We’d rather have a friendly conversation than have something accidentally unclear or inaccurate published.

Flattery might not get you everywhere, but in our case, it’s certainly appreciated.

So, if you want the facts straight from the source, don’t settle for someone else’s commentary. Visit our members listings page to explore our accredited members and see what sets them apart. You’ll find all the information you need about our standards and the companies that meet them, because when it comes to compliance, best practice, and transparency, FCSA is the name you can trust.

The post Flattery gets you everywhere (sometimes) appeared first on FCSA.

The tool provides workers and employment businesses with the ability to estimate both gross and net pay for umbrella company workers. For those working through an umbrella company, this tool gives a clearer picture of what deductions will be made and provides more visibility into the take-home pay process. For recruitment agencies, it can help ensure greater accuracy when managing pay estimates for umbrella workers.

One key feature of this tool is that it rolls up holiday pay as part of the calculation. While this is an efficient method for some umbrella companies, it’s important to remember that not all umbrella companies apply holiday pay in this manner. The calculation may not accurately reflect an individual’s take-home pay if the umbrella company follows a different procedure for holiday pay. 

Additionally, the exclusion of some nuances in individual workers’ tax affairs or personal circumstances   may give workers a higher take-home pay estimate than they would receive in reality. Therefore, while the calculator provides an estimation, it may not always reflect a precise or fully accurate amount. We will continue to work with HMRC to help them improve their calculator.

Despite these few shortcomings, this is a welcome step in the right direction. The fact that HMRC has taken this initiative demonstrates a commitment to helping workers and businesses navigate the complexities of umbrella pay with more clarity. More importantly, it may help highlight potential compliance issues, especially with ‘payroll pirates’ who continue to manipulate pay structures to their advantage. By providing a standardised way to calculate pay, HMRC is offering a tool that may expose unscrupulous umbrella companies, which are often at the heart of compliance issues within our industry.

At FCSA, we are committed to promoting high standards of compliance and transparency, and this tool aligns with our mission to clean up the sector. It’s an important reminder that accurate pay calculations, including correct holiday pay practices, are fundamental to ensuring workers are treated fairly.

While this is a positive step, there is still work to be done and no doubt HMRC will improve the calculator based on feedback. This calculator provides an additional layer of transparency but, as always, workers should continue to be diligent and seek advice if they are uncertain about their pay or the calculations they receive.

We at FCSA are pleased to see HMRC taking steps to make the sector more transparent and compliant. We hope that tools like this will empower workers and recruiters alike, and help root out bad practices, ultimately driving a more ethical and compliant umbrella sector.

We will continue to collect our Members’ feedback on the HMRC tool and ensure that feedback reaches HMRC.

View the calculator here.

The post HMRC’s New Umbrella Pay Calculator – A Step in the Right Direction appeared first on FCSA.

At first glance, an increase in Employer NICs may seem like a tax on businesses, but it is a tax on working people and for umbrella workers in particular, the reality is quite different. In the umbrella model, Employer NICs have to be deducted from the overall assignment rate. This means that when these contributions rise, they are deducted directly from the worker’s assignment rate and that reduces the amount available to them as gross pay. In other words, any increase in Employer NICs ultimately comes out of the pocket of the individual worker, reducing their take-home pay even though their agreed assignment rate remains unchanged.

This is particularly troubling because it turns what is branded as a tax on businesses into what is effectively a tax on working people. Umbrella workers are already navigating a complex system where pay and deductions are often hard to predict, and a rise in Employer NICs would make this even more difficult. For many of our member’s employees, this will feel like a direct hit, and it’s essential we understand the broader impact this could have on their livelihood.

An Unseen Danger: National Minimum Wage Risks

A more pressing concern is that a rise in Employer NICs could, in theory, push some umbrella workers’ gross pay dangerously close to – or even below – the National Minimum Wage (NMW). For those on the lower end of the wage scale, this could create serious compliance issues  for employers.

It’s critical for umbrella companies, end-users and employment businesses alike to understand that this change could have knock-on effects. Compliance with NMW regulations must remain a priority, and we must be proactive in ensuring no worker is left in a precarious position due to changes outside of their control.It will sometimes be necessary for employment businesses to increase the assignment rate paid for a worker.

Divvie Tax rise – an  Impact on Small Business Owners and Contractors

While umbrella workers would bear the brunt of a rise in Employer NICs, small business owners and contractors could face additional challenges if the government proceeds with a rumoured increase in dividend tax. Many small business owners pay themselves through dividends, and an increase in taxation here would further reduce the financial flexibility of hundreds of thousands of people across the UK.

Small businesses are the backbone of our economy. They create jobs, drive innovation, and fuel growth. They also provide essential services to larger firms and are a critical component of the supply chain across multiple sectors. A tax increase or threshold change that diminishes their earnings, especially in a challenging post-pandemic economic environment, could dampen entrepreneurship and slow economic recovery.

FCSA’s Position: Advocating for Fairness

At the FCSA, we will continue to champion the rights of umbrella workers, contractors, and small business owners. It’s vital that the government understands the full consequences of its fiscal decisions and recognises the impact these changes will have on everyday workers and small businesses.

We strongly believe that an increase in Employer NICs is a tax on working people, not just businesses, and we will be voicing this position to policymakers in the run-up to the Budget. Similarly, we will be making the case that a rise in dividend tax would unfairly penalise small business owners and pensioners alike.

In the meantime, we urge our members to remain vigilant. If Employer NICs do rise, it’s essential to review your current pay structures to ensure compliance with NMW regulations, and we’ll be here to support you through any necessary changes.

Looking Ahead

As always, FCSA will remain at the forefront of these discussions, advocating for policies that support fair treatment and financial stability for all. The coming months could bring significant changes, but together, we can navigate these challenges and ensure the voice of freelancers, contractors, and small businesses is heard.

The post Threat of an Employer’s NICs Rise appeared first on FCSA.

When allegations of misconduct or non-compliance surface within our membership, we respond swiftly by initiating thorough investigations. Independent assessors diligently conduct these investigations, carefully selected for their expertise and unwavering commitment to impartiality. Through their diligent efforts, we ensure a comprehensive and objective review of the facts at hand.

Central to our investigation procedure is the strict adherence to confidentiality. We understand the gravity of the accusations and their potential repercussions on the reputations of the individuals and entities involved. Therefore, as a matter of principle, we refrain from publicly announcing or discussing ongoing investigations. This practice is consistent with industry standards and serves to safeguard the integrity of the process and protect the rights of all parties involved.

Premature disclosure can compromise the process’s integrity, undermine the parties’ rights, and lead to unnecessary and damaging speculation or misinformation. Moreover, it would also damage the reputation and infringe on the rights of the parties involved to announce an investigation. By maintaining confidentiality, we uphold the integrity of the investigation process, ensuring that it remains free from external influence or bias.

Our commitment to due process necessitates that investigations be conducted diligently and thoroughly, within the necessary timescale. While the resolution of complex cases may take several months, we remain steadfast in our dedication to conducting investigations with meticulous attention to detail and fairness. It is therefore important to emphasise that our investigations typically span around three months, although this timeframe may vary based on the complexity of each case. Throughout the process, we remain steadfast in our commitment to impartiality, fairness, and the pursuit of truth.

In conclusion, our approach to investigations reflects our commitment to upholding integrity, fairness, and due process. By conducting investigations independently and maintaining strict confidentiality, we ensure that the rights of all parties are protected and that the integrity of the process remains intact. While transparency is valued, we believe that safeguarding the integrity of the investigation process is paramount and requires us to refrain from public announcements until the conclusion of an independent investigation.

The post Upholding Integrity: Our Approach to Investigations appeared first on FCSA.

Just 20-something days into her chancellorship, the UK’s new boss of HM Treasury, Rachel Reeves, has delivered a short but serious statement on how she plans to move forward – with controversial cuts to winter fuel allowances and the cancellation of mooted infrastructure projects, as well as large pay increases for many public sector workers.

As the chancellor now prepares for Autumn Budget 2024 on October 30th 2024, I want to outline three big policy areas which are critical to ensuring the continued growth and stability of the contracting, freelance and temporary sector.

It’s a sector which contributes hugely to the growth agenda and is of enormous benefit to UK plc, writes Chris Bryce, CEO of the Freelancer and Contractor Services Association.

1. Clarity and stability in tax legislation

One of our primary hopes is for Reeves to provide clarity and stability in tax legislation.

The frequent changes and uncertainties surrounding tax policies, such as the IR35 rules, have historically caused significant disruption for contractors and the firms supporting them.

As the Freelancer & Contractor Services Association (FCSA), we’ll be advocating for a clear, consistent, and fair tax regime that supports self-employment and entrepreneurship.

2. Support for training and upskilling

Our organisation would like to see measures that support training and upskilling for contractors.

This includes tax incentives for training expenditures and funding for professional development programs, as well as better targeting for the Skills & Apprenticeship Levy.

With the rapid technological advancements and changing market demands, ongoing training is essential for maintaining a competitive and skilled workforce in the freelance sector.

3. Recognition of the value of the temporary workforce

While the ‘New Deal’ proposed by Labour has many interesting aims, we urge the chancellor and her colleagues to take great care not to undermine this vital sector of the UK’s workforce.

We are actively engaged in discussions with government and will contribute to forthcoming consultations.

What chancellor Reeves shouldn’t unveil for UK contracting at Autumn Budget 2024

As Autumn Budget 2024 clearly has the potential to contain some unwelcome measures, we specify below what we hope chancellor Reeves refrains from announcing.

1. Increased tax burden

One of the FCSA’s significant concerns is the potential for an increased tax burden on the workforce.

Previous Budgets have seen attempts to close perceived tax loopholes, which sometimes disproportionately affect the self-employed and temporary workers.

My fear is that new tax measures could further complicate the financial landscape of the contractor sector, making it harder for workers – and service providers – to operate effectively.

2. Unintended consequences of employment law changes

Changes in employment law, such as Labour’s pre-election floated Single Worker Status and the party’s earlier granting of worker protections, could have unintended consequences for umbrella companies and other service providers in the freelance sector, pushing up the amount they’d need to charge for their service.

While recognising that the current landscape may be confusing or uncertain, our concern is that poorly thought out changes might increase operational costs and reduce flexibility, potentially driving some businesses out of the market.

3. Neglect of contractor or freelance-specific issues

There is a risk at Autumn Budget 2024 that the unique challenges faced by freelancers, contractors and temporary workers get overlooked in favour of policies aimed at traditional employment models.

I would like to highlight to the chancellor the importance of recognising the distinct needs of this atypical, flexible, temporary labour sector.

We believe that any new ‘one-size-fits-all’ approach to labour market policy could be detrimental to this key sector.

What policy announcements does FCSA expect at Autumn Budget 2024?

1. Review and reform of IR35 legislation/ the off-payroll working rules

The Off-Payroll Working rules have long been a contentious issue for the freelance community.

FCSA expects the government to review and possibly reform the OPW rules to reduce complexity and ensure fair treatment.

We advocate for a system that accurately reflects the nature of freelance work without imposing undue burdens on contractors or businesses and recognises the contribution of contractors to growth in the UK.

2. Enhanced support for small businesses and startups

Our organisation expects the chancellor’s package on October 30th to include enhanced support for small businesses and start-ups, many of which rely on freelance or temporary talent.

This could take the form of tax breaks, grants, and other incentives that encourage the growth and sustainability of small enterprises.

3. Support for compliance and best-practice

Internally drawn up but affecting many operators in the contractor market today, FCSA’s accreditation process emphasises compliance with high standards of professional and ethical conduct.

My expectation is that the government will support initiatives that promote compliance and best-practices within the industry and bring forward sensibly framed regulation.

This could involve funding for compliance programs, partnerships with industry bodies, and recognition of accredited organisations.

4. Enforcement and policing

We have long been supportive of the formation of a properly resourced Single Enforcement Body to tackle employment malpractice, worker abuses, tax fraud and, importantly, promoters of unlawful tax avoidance schemes.

This new Labour government’s efforts to clamp down on such behaviour (via what it calls the Fair Work Agency) must be properly resourced, and have the capacity to ensure that those people and organisations operating lawfully are not placed at a competitive disadvantage to those which are not.

The post Autumn Budget 2024: UK contractor sector’s hopes, fears and expectations appeared first on FCSA.

Our existing manifesto states our position on many aspects of the temporary labour market in the UK, and we look forward to sending a copy of this to newly appointed ministers following the general election 34 days from now.

Here’s what we believe all UK political parties need to consider and offer to enhance the freelance and contractor sector.

1. Strengthen legal and regulatory frameworks

Our sector needs clear, fair, and effective regulation.

We need policies that protect legitimate freelancers and contractors while targeting non-compliant entities that undermine the contracting industry’s reputation.

We require reforms that provide precise criteria distinguishing between employees, workers, and self-employed individuals to ensure that freelancers and contractors receive appropriate rights and obligations.

And, of course, IR35/Off-Payroll Working legislation has long been a source of frustration, confusion and contention.

A party looking for the support of the much-ignored and much put-upon freelance sector must propose both a review and an overhaul of these rules. The goal? To make them more understandable and easier to comply with, by reducing the administrative burden on contractors and engagers alike and making ‘intent’ between the contractor and engager a key factor.

2. Supporting fair taxation and financial security while recognising freelancers as distinct

Our FCSA manifesto highlights the need for a fair tax system that treats freelancers and contractors fairly compared with traditional employees.

This includes the need to consider the distinct financial risks and expenses borne by self-employed individuals — a factor that was almost completely ignored during the covid pandemic, and which may come back to bite prime minister Rishi Sunak and his Conservatives.

Political parties, regardless of hue, need to create policies that ensure freelancers and contractors have access to pension schemes, parental leave, sickness provision and social benefits.

3. Promoting industry standards and professionalism

Our association advocates for high standards and professionalism within the freelance and contracting industry.

We want to see initiatives from our future political masters which encourage or mandate accreditation for employment businesses and payment intermediaries. This would help ensure that these entities adhere to ethical standards and provide reliable services to freelancers and contractors.

4. Enhancing business environment and opportunities

We believe it’s hard to overemphasise the need for a supportive business environment that fosters growth and innovation.

A skills-savvy and AI-aware government would also provide funding for training programs to support professional development, and help individuals stay competitive and adapt to changing market demands.

In particular, the Apprenticeship Levy receives massive funding from payment intermediaries, and we’d like to see that funding made available back to the very people who produce it.

To win the contractor vote, a party must consider how to improve access to finance for freelancers and small companies. This might involve expanding government-backed loan schemes or encouraging the creation of new financial products designed specifically for the self-employed.

We also want to see extensive investment in a robust digital infrastructure that supports remote working and connectivity, which are vital for freelancers and contractors in technology, and almost all other key industries. High-speed internet access and cybersecurity measures are critical components of this investment.

Any future government which wants the freelance vote will need to encourage the public sector to engage more independent professionals and contractors in its projects. We need a government which is prepared to move unnecessary barriers that prevent small businesses and self-employed individuals from competing for government contracts and introduce and enforce initiatives which ensure that a fair share of government work is given to contractors.

5. Addressing health and wellbeing

Freelancers and contractors often face unique challenges regarding support for their health and wellbeing.

We ask that political parties develop initiatives that provide mental health support tailored to the self-employed community and ensure that freelancers and contractors have access to affordable healthcare services. Too much of the electorate now operate freelance or partly freelance for this area of wellbeing and mental health to be ignored.

General Election 2024 for freelancers and contractors needs to go like this…

Although many commentators (including pollsters) regard the outcome of General Election 2024 as pre-determined, there’s a long way to go in the next 30-odd days and much to play for. Remember, even just a week is still a long time in politics, so no side with skin in the game can afford to be complacent and ignore our burgeoning temporary labour market.

Earlier on I mentioned the Tory party. Well, for its part, Labour has said that it “will strengthen rights and protections to help self-employed workers thrive in good quality self-employment.” We at the FCSA need to see a lot more detail from Sir Keir Starmer’s party here. So we’ll continue to work with his policy teams to help ensure Labour gets their proposals right. 

With even more certainty, I can assert that the party with the best policies for strengthening and enabling the market we operate in will likely gain votes from the 5.4 million-strong self-employed and contractor community – one of the most productive and vital sectors in the UK. And by incorporating FCSA’s recommendations into their manifesto, this party (or parties) would show that they’ve recognised just how important and valuable the contribution made by those more than five million people really is.

Lastly, here’s my takeaway for the UK’s political parties

My final message is this — if one UK political party can demonstrate their serious commitment to fostering a fair, supportive, and dynamic environment for freelancers and contractors, then it might just turn what may previously been a ‘No’ into a ‘Yes’ on July 4th.

Regardless of the outcome, on July 5th, FCSA will work with whatever new government takes office and we’ll continue to work with officials to ensure that the environment for freelancing and contracting in the UK is improved.

The post Contractors, here’s five things the UK’s political parties should do to win your vote on July 4th appeared first on FCSA.

It does seem that Budgets or “financial statements” come around far more often than they used to, so here I am again trying to predict the outcome of a Budget. Inevitably, we’ll all have a wish list of measures we’d like to see but, equally inevitably, we won’t get everything we ask for.

In the Autumn Statement, Chancellor Jeremy Hunt, delivered a few measures that brought a small measure of cheer to contractors, namely the reductions in National Insurance Contributions, especially welcome for those who are self-employed as opposed to running their own limited companies or working through an umbrella, but he didn’t go that far.

What might we see on March 6th? Well, despite some economic progress with growth slightly ahead of what was predicted and tax receipts slightly up, the Chancellor has a little room for manoeuvre but not much. Yes, it’s an election year and his party is well behind in the polls, but can Hunt really afford a “giveaway budget” which will attract voters? Much as he might like to, I’m not sure he has enough wiggle room.

Having said that, this is a pre-election Budget and both Ken Clarke and Nigel Lawson tried to sweeten the electoral pot with income tax cuts, and Hunt may choose the same headline-grabbing path with a cut in basic rate from 20% to 19% – putting more money in voters’ pockets but with a concomitant drop in tax relief on pension contributions. There’s a remote possibility that we might even see further measures on NICs, perhaps even a drop in the employers’ rate which would help stimulate economic growth.

There’s a much stronger possibility the Chancellor will have a go at Inheritance Tax. Although most people aren’t actually affected by that, it’s another front-page headline which will make voters feel good. Fuel Duty and taxes on alcohol may see the same treatment for the same reasons.

What might be even more welcome but is pretty unlikely is the lifting of the freeze on tax thresholds. First announced by Chancellor Sunak in March 2021 and extended in 2022 from April 2026 to April 2028. The additional rate threshold was also dropped from £150k to £125k. A significant raising of the higher rate tax thresholds would affect hundreds of thousands of middle-income voters such as nurses and teachers who have been dragged into the upper tax rates by stealth over the past few years and this would be a popular step with them, if not the Opposition.

One measure I’m sure many readers would like Hunt to take, is to sort out the real mess between £100k and £125k, the loss of personal allowance means an effective tax rate of 60%! It makes sense to fix this, but it’s pretty esoteric for most voters, so it’s probably not near top of Hunt’s agenda.

The short-serving PM Liz Truss and her Chancellor Kwasi Kwarteng also tried to do away with the 45% additional rate above £125k and Hunt might have another try, although the guaranteed howls of “making the rich richer” might deter him from such a move.

What measure might we see that directly concern our sector? Well, I think it’s entirely unlikely we’ll see any substantial reform of the off-payroll working rules or IR35. We’ve seen calls for reform and also outright repeal, and Truss and Kwarteng failed in their attempt so I think it’s only a slim possibility Hunt will address it.

We’re also unlikely to see much positive movement in Corporation Tax or Dividend Tax rates.

Unfortunately, I’m also pessimistic about the Budget being used as a vehicle to introduce much-needed regulation on the umbrella market. Despite many years lobbying for regulation and many responses to various government consultations, I think we’re still some way from seeing regulation. And, although tax is in part a driver for regulation of the sector, employment matters are also key, so I think simple fiscal measures wouldn’t, on their own, be enough.

Whatever happens on March 6th, there is only one thing I can absolutely guarantee: not everyone will be happy.

The post Predicting the Outcome of the UK Budget 2024: What Contractors Can Expect appeared first on FCSA.

It does seem that chancellors’ Budgets or ‘Spring Statements’ come around far more often than they used to.

So for me this article feels a bit like ‘here I go again,’ as I strive to predict the outcome of a Budget — another ‘fiscal event’ we’ll submit our own wishes for to HM Treasury, writes Chris Bryce, CEO of the Freelancer & Contractor Services Association (FCSA).

If you ask, you won’t get…

Rather inevitably, we ALL have our own wishlist of measures we’d like to see Mr Hunt announce but, equally inevitably, we ALL won’t get everything we ask for. That’s even though many, many, of us will express those wishes with the betterment of the UK’s contractor sector in mind.

In the 2023 Autumn Statement, the chancellor delivered a few measures that brought a small measure of cheer to contractors, namely the reduction in National Insurance contributions. This reduction (to Class 4, and Class 2 axed; both from 06.04.24) was especially welcome by those who are self-employed, as opposed to running their own limited company or working through an umbrella company. For these two contractor groups, he didn’t go that far although it should be said ‘brolly’ contractors benefited more than their ‘LTD’ counterparts thanks to a Class 1 shaving by 2 pence (effective since 06.01.24).

Will Spring Budget 2024 start to see PSCs brought in from the cold?

So what might we see on March 6th 2024? Will HM Treasury’s boss go further to help workers in conventional employment, or might he start the process of bringing Personal Service Company contractors in from the cold? Relevant to such PSCs, one could argue that any impact of the off-payroll rules looks to have petered out. Yesterday, the ONS said “early estimates” for December 2023 indicate that the number of payrolled employees rose by a miniscule 1.0% compared with December 2022.

Well, Spring Budget 2024 by my own early estimate might very well come across as a bit bitty. Despite some economic progress with growth slightly ahead of what was predicted and tax receipts slightly up, Mr Hunt has only a little room for manoeuvre.

Yes, it’s an election year and his Conservative party is well behind in the polls (a hefty 120-seat majority is tipped for Labour leader Keir Starmer if we all voted tomorrow, meaning his party would win twice as many Commons seats as the Conservatives).

Little wiggle room = bitty Budget

But can the chancellor really afford a ‘giveaway’ Budget,’ offering tax treats if not cuts, to attract voters? Much as he might like to do this, I’m not sure he has enough wiggle room.

Having said that, this is a Tory pre-election Budget and Mr Hunt will be aware that both Ken Clarke and Nigel Lawson, during their chancellorships, tried to sweeten the electoral pot with income tax cuts.

The current chancellor may therefore choose the same headline-grabbing path with a cut in basic rate from 20% to 19%, which would put more money in voters’ pockets — but with a concomitant drop in tax relief on pension contributions.

There’s a remote possibility that we might even see further measures on NICs, perhaps even a cut in the Employer’s rate. It’s hard not to support such a cut, as it would surely help stimulate economic growth.

IHT reform on March 6th? It’s a stronger possibility

But there’s a much stronger possibility at Spring Budget 2024 that the chancellor will have a pop at Inheritance Tax. Although most people aren’t actually affected by IHT, it’s another newspaper headline-winner, which will make voters feel good. Fuel duty and taxes on alcohol may see the same treatment — for the same reason.

What would be even more welcome but currently looks pretty unlikely is the lifting of the freeze on tax thresholds. This freeze was first announced by chancellor Rishi Sunak in March 2021 but it got extended in 2022 from April 2026 to April 2028.

The ‘additional rate’ tax threshold was also dropped from £150,000 to £125,000. A significant raising of the higher rate tax thresholds on March 6th would positively affect hundreds of thousands of middle-income voters, such as nurses and teachers, who have been dragged into the upper tax rates by stealth over the past few years. This would therefore be a popular step with them, if not the opposition.

The extortionate, effective, esoteric, 60% tax rate

One measure I’m sure many ContractorUK readers would like Mr Hunt to announce, is to sort out the real mess between earnings of £100,000 and earnings of £125,000. The loss of the personal allowance here puts affected individuals on an effective, extortionate tax rate of 60%! It makes sense to fix this, but it’s pretty esoteric for most voters, so it’s probably not near top of the chancellor’s agenda.

The government, albeit not this one, have had a go here before, The short-serving prime minister Liz Truss, and her chancellor Kwasi Kwarteng, tried to do away with the 45% additional rate above £125,000. With enough time elapsed from their misfires, Mr Hunt might have another try. But the messaging will be important here. If he doesn’t pay attention to how such a move might be ‘sold,’ the howls of a Tory chancellor ‘making the rich richer’ are guaranteed. And that criticism, alone, might be enough to deter him from intervening.

IR35 and umbrella company regulation

But what measures might we see at Spring Budget 2024 concerning the vitally important contractor sector? Well, I think it’s entirely unlikely we’ll see any substantial reform of the off-payroll working rules or IR35. We’ve seen calls for reform and also calls for outright repeal of the April 6th 2017/2021 frameworks. But with Mr Hunt actually going on TV to take back what Truss and Kwarteng tried (but failed), perhaps because they didn’t get onboard a certain government department which clearly wants OPW to stay, I think it’s only a slim possibility that Budget 2024 will even address IR35.

Unfortunately, I’m also pessimistic about Wednesday March 6th being used as a vehicle to introduce much-needed regulation of the UK’s contractor umbrella market. Despite many years lobbying for regulation and many responses to various government consultations, I think we’re still some way from seeing regulation. And, although tax is in part a driver for regulation of the sector, employment matters are also key, so I think simple fiscal measures wouldn’t, on their own, be enough. It’s a shame this is the case, and I say this having contributed to the umbrella company regulation consultation, a bit like we’re going to contribute to the Spring Budget 2024’s official call for submissions, too.

Whatever happens on March 6th, there is regretfully only one thing I can absolutely guarantee: not everyone will be happy.

The post A bitty Spring Budget 2024 that won’t please everyone, let alone contractors? Inevitably appeared first on FCSA.

In the ever-evolving landscape of the freelance and contractor industry, adaptability is the name of the game. As the Chief Executive of the Freelancer and Contractor Services Association (FCSA), I’ve had the privilege of witnessing firsthand how our industry has transformed and continues to do so. In this, I’ll share some insights and observations on where we stand today and where we might be headed tomorrow.

Embracing Change

It’s no secret that the COVID-19 pandemic has accelerated many changes in the way we work. The traditional 9-to-5 office job is no longer the default for many professionals. Freelancing and contracting have surged in popularity, offering individuals greater flexibility and businesses more agility in their workforce. According to a recent study by Upwork, the freelance workforce is expected to grow by 80% by 2030. In the UK, the number of freelancers is expected to reach 2.7 million by 2025 (IPSE). The freelance economy in the UK is worth £125 billion (IPSE).

The Role of Technology

Technology has been a driving force behind the growth of the freelance economy. With the rise of remote work and the gig economy, platforms and tools have emerged to connect freelancers with opportunities and streamline administrative tasks. This has made it easier than ever for skilled professionals to find work and for businesses to tap into a diverse pool of talent. For example, a recent study by McKinsey found that 80% of businesses are now using some form of freelance or contractor workforce.

Navigating Regulation

As the freelance and contractor industry has grown, so too has the need for clear and fair regulation. At the FCSA, we’ve been at the forefront of advocating for the rights and protections of freelancers and contractors. We believe that a well-regulated industry benefits everyone, ensuring that workers are treated fairly, and businesses can confidently engage with freelancers.

The Future of Work

Looking ahead, the future of work is likely to be a hybrid one, with a blend of traditional employment and freelance arrangements. Professionals will have more choices in how they work, and businesses will need to adapt to attract and retain top talent. This presents both challenges and opportunities, and the FCSA is committed to supporting our members through these transitions. For example, a recent study by the World Economic Forum found that 75% of employees would prefer a hybrid work arrangement.

Conclusion

In conclusion, the freelance and contractor industry is undergoing a significant transformation, and the FCSA is here to guide our members through these changes. By embracing technology, advocating for fair regulation, and staying attuned to the evolving needs of our workforce, we can ensure that the future of freelancing is bright and prosperous.

The post Navigating the Future of Freelancing appeared first on FCSA.

Chancellor Jeremy Hunt’s second Autumn Statement has made waves, primarily for its headline act: a reduction in Employee’s National Insurance Contributions (NICs) from 12% to 10%. This move translates into a welcome tax cut for approximately 27 million workers in the UK. Notably unconventional was the immediate implementation from January 6th, 2024, a departure from the traditional April commencement. The self-employed, specifically, have reason to celebrate with the abolition of Class 2 NICs and a significant reduction in Class 4 NICs from 9% to 8%, providing a substantial boost for sole traders.

In the contractor realm, Chancellor Hunt’s proactive steps to combat late payments have been met with approval. However, a noteworthy development that might present administrative challenges for employers is the proposal requiring them to contribute to the pension provider of choice for individuals with existing schemes. The specifics of this initiative, including its potential impact on salary sacrifice arrangements, await detailed clarification.

As well as these headline changes, there’s been some significant movement in other areas. The Living Wage – as presaged earlier in the week – will rise to £11.44 per hour and the age threshold reduced from 23 to 21 – a big boost for the low-paid. A second, most welcome, change is the Chancellor’s commitment to introduce tougher consequences for promoters of tax avoidance schemes, including a new criminal offence for those who continue to promote avoidance schemes after a stop notice is issued  HMRC will also get wider powers to act against directors of tax avoidance schemes.

While the Budget’s overarching theme revolves around incentivising business investment, featuring measures such as extended full expensing, the introduction of more freeports, and prolonged small business rates relief, there was a conspicuous absence of any mention of umbrella regulation. 

This omission may disappoint some, but it aligns with the fact that government has yet to publish its response to the consultation, which closed in late August. Furthermore, including such measures solely in a Finance Bill poses technical challenges, offering a plausible explanation for their exclusion from the Chancellor’s speech. On a lighter note, the decision to freeze duties on wines, beers, and spirits is a welcome lifestyle touch that is likely to resonate positively with many.

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