Over the past few years since Covid hit, we have seen a downturn in the world of contracting, but for the first time, opportunities for contractors are finally improving.
In contrast, there have been a huge number of newspaper headlines about businesses unable to fill jobs. Many of these are short-term or zero hours contracts or in businesses offering minimum wage. Some of these are permanent jobs at businesses that usually have many applicants and fill their vacancies quickly.
Well for the first time since covid, things seem to be turning around. This is a significant change and one that contractors can be happy about. It seems like opportunities for contractors are finally on the rise again.
Contractors say and the data backs it up, that roles are increasing again. There are 13% more roles now than looking pre-pandemic back to July 2019. Some might say this gap is too wide to measure, but looking back to July 2021, the rise is still 7% so say the Association of Professional Staffing Companies (APSCo).
This is in quite a stark contrast to figures from ONS who say there is a slowdown for permanent jobs.
During the pandemic and since the changes to IR35, we understand that a sizeable number of contractors made the change to permanent work. This is an interesting changeover. It may have an impact if the trend continues in tempting previous contractors back to the business of working more flexibly.
So, from June 2022 to July 2022, contractor roles saw an increase of 2% and permanent jobs saw a reduction by 1%. That is just from a single month. Imagine the way this could build up over a quarter or a year to come. It will be interesting to look at this at the end of 2022 and see the impact over the full year.
What does the APSCo report predict?
In APSCo’s June 2022 update, they mention hearing that their own members were struggling with hiring.
This led to them advertising more roles than needed, to try to find an appropriate candidate. Therefore, there is the possibility that not all of the roles actually exist, which may inflate numbers. This is a shame, but understandable and may give a wider pool of potential candidates the confidence to apply, depending on the range of criteria.
While it is not all stable in the jobs market, there is an interesting point to consider. Not just contract type, it also seems like the type of vacancies are changing too. Pre-pandemic only 2% of tech jobs were remote.
By June 2022, this is 11%. It looks like we are changing the way we see work more generally, which is such an interesting shift. This is bound to be a good thing for contractors as it may allow a much greater flexibility. It is especially true for those in the north of England where fewer opportunities are available.
Also, the same for those that live outside big cities. If you are considering a new opportunity, then now is the right time to be looking for it. Any good news for contractors is always welcome and this seems like a good thing for now.
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HMRC Identifying More Rogue Firms
As time passes, it is a positive move to see rogue firms getting singled out by HMRC.
This is a list that HMRC are collating over time, of rogue firms with tax avoidance schemes. Believe it or not, there are plenty still operating and touting their business. They do this under the disguise of legitimate practice. They draw in unsuspecting contractors and freelancers promising them all kind of benefits.
Offering a reduction taxes and potential increases in other benefits, what they offer looks so desirable. Yet all that glitters is not gold and often their schemes are highly complex and highly suspect. Their poor practices essentially come down as tax avoidance, sometimes without a contractor realising.
It all depends on the way they portray their offerings.
Of course, for those in the know, it is easy to spot something too good to be true quite easily. For contractors with experience, they have existing knowledge about financial matters. They know what costs, taxes, expenses and/or dividends to expect from work they do. Yet for those with less experience there may well not be that information.
The firms offering these services are also very careful in the way they portray them. They want people to join up after all. Of course, there will always be some people who think something is not right but go for it anyway. They think they are too clever to get found out or are willing to take the risk.
Additional Firms Named by HMRC As Tax Avoidance Schemes
Well, HMRC’s list is growing of schemes and those who operate them.
The total as of August is now fourteen different firms. The three newest firms operate in a similar manner by paying the National Minimum Wage and then hiding the rest of the pay as a kind of loan. This avoids tax payments and National Insurance.
The three firms are PAYEme Ltd in Liverpool, Gateway Outsource Solutions Ltd in Stockport and Contractor Care Ltd in London. If only any of them did care enough to operate legally. With the recent HMRC investigations into non-compliance, it is easy to imagine where their attentions will be pointing next.
Why not focus on firms you know are acting improperly. Some might say why can these firms not just be shut down to stop their shady dealings rather than be added to a list?
Well, that remains to be seen, but at least the public are being made aware of them. Hopefully this will mean that some unsuspecting contractors are not drawn into their web of lies.
It is worth keeping an eye on this list as a contractor as it is getting longer and longer over time. If you have concerns about any firm you work with, first look at the way they deal with your finances. You have the power to challenge them and take your money elsewhere if you feel there are issues.
If something seems to offer too much, then it is probably cannot trust it.
