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Stock up with tinned peaches and powdered eggs!

September 29, 2011 in AWR, Contractor News, Freelancing, Industry comment, Life, Recruiter News

It’s almost the 1st October and the end of the world is nigh! I have already sent the wife down to Morrisons to clear the shelves of tinned peaches and soup.

For those of you who have been blissfully unaware (e.g. not in recruitment or in the service industry that supports it) then 1st October sees the formal start of the Agency Workers Regulations (AWR) (and you can go here if you need the basics). In very simple terms it means a clock has started ticking, not as some might think, as precursor to doomsday but to the 12 weeks hence (24th of December!) where a vulnerable agency worker can potentially receive equal pay and conditions of a full time counterpart (if one exists). I may sound a bit cynical but the amount of work that has gone into preparing for this has been quite substantial and for the vast majority of Parasol and Clearsky users it won’t make any difference, it will be business as usual. As a very sensible and safe business we were already doing 90% of what the regulations require so most of our work has been in trying to educate and inform in a market which has very interesting views.

So the boring message is that it’s very much carry on as normal at Parasol House and Clearsky towers. We have shiny new payslips for Parasol employees and some changes in terminology but for contractors it won’t be much different. For Agencies, it’s just as dull, were open for business, a model of operation for all those interesting views and primarily a nil cost, no hassle approach to the legislation.

I suspect I will have to write some more as the dust settles in October and the first potential claims emerge (probably in Union backed environments) after December but in the meantime I shall put the peaches in the garage next to the peas that we bought in December 1999.

New theme….

August 25, 2011 in Life, Uncategorized

Gave the old blog a make over and this will check if twitter feed still works too

How was 2010 for you?

January 4, 2011 in Contractor News, Freelancing, Industry comment, Life, Recruiter News, Tax

Welcome to 2011 and very best wishes to everyone for the year ahead. Let’s hope it’s happy, healthy and of course prosperous. Here at Parasol and Clearsky we are looking forward to another busy year and as we approach our 11th year of trading, there is much to be done.

2010 was an interesting year in many respects, January 2010 saw the high profile collapse of an “Umbrella” company and I use the quotes as the reality of the model was once again exposed and the spectre of offshore activities discovered. The noise around the Agency Workers Regulations (AWR) intensified as the reality began to sink in and this was followed by National Minimum Wage consultations and HMRC consultations on the overall operation of PAYE. The new Government then instigated the office of tax simplification and ir35 once again regained top spot in Contractor related news and debate. More offshore solutions came under pressure through some high profile collapses and alleged financial irregularities. So on the political landscape it was pretty full on and our founding membership of FCSA helped us contribute and educate on many of these issues for the (usually unseen) benefit of Contractors and Agencies alike.

The actual business of contracting was tough with roles and rates remaining a challenge. I am not sure 2011 will be hugely different but I think steady progression is better than boom and bust. As we progress through the year  I also expect the noise around AWR to intensify, remember that the true employment based solution is already doing much of what AWR requires and this compliant solution will remain after October!

I therefore look forward to 2011 with sensible optimism and confidence that Contracting will remain a crucial part of the UK economy. We will be doing our very best to support this and have always been about the long term, here’s to the next ten years!!

Finance Act should be welcomed by umbrella companies

December 15, 2010 in Contractor News, Freelancing, Industry comment, Life, Recruiter News, Tax

Publishing the contents of the act early was a positive move by the government as it allows businesses to fully digest the act, understand its implications and make sure their business models are fully prepared for its introduction.

It was no surprise that the government has taken a hard-line with EBTs and other forms of tax avoidance as this has been discussed for some time, however, some providers of services to contractors have taken the announcement as an opportunity to release misleading information and confuse the market. This is inaccurate, irresponsible and fundamentally wrong.

There must be a distinction made between umbrella companies who work closely and openly with HMRC in order to protect contractors, and companies that exploit loopholes and make bold or unrealistic claims about take home pay. Correctly structured and compliant umbrella companies have nothing to fear from the Finance Act, and the reality is that this provides an opportunity to demonstrate that compliance and transparency to government, contractors and the agencies that place them.

In the past, this industry has been tarnished by unscrupulous providers making unrealistic claims about the amount of take home pay a contractor can expect, by offshore providers not fully explaining the risks involved in using an EBT scheme or operating with a lack of transparency to a level that even the contractors involved in the schemes cannot fully explain how they work. Thousands of contractors have also been persuaded to join these schemes without being informed of HMRC investigations into them.

This had to stop and therefore the Finance Act 2011 should be welcomed by umbrella companies. It now remains the duty of leading umbrella companies like Parasol, and organisations such as the FCSA, to support and educate contractors and the agencies that place them, encourage further transparency, open discussion and compliance throughout the industry, and ensure that the bad practice of a few does not bring down the industry and prevent professional contractors from running their business and making a valuable contribution to the UK economy.

June Budget 2010 – Contractor win?

June 22, 2010 in Business Expenses, Contractor News, Freelancing, Industry comment, Life, Recruiter News, Tax

So Mr. Osborne delivered his first (seemed short and snappy to me) budget and whilst the devil is in the detail (available here ) here is my take on how it might help (or hinder) Contractors, Agencies and those important end clients. Let’s have a look at the “big things” first:

  • In general terms it appears to be a relatively pro business budget so that for those of us working in this sector, we may feel somewhat optimistic rather than doomed. The counter of is that the “25% cut in department spending” over four years could have ramifications for those working on Government projects. However, as is always possible, that could be actually countered by a permanent headcount freeze and supplemented by Contractors. Let’s not forget that UK Gov is one of the biggest users of Contractors!
  • It appears that the NI incentives to set-up businesses (outside of the land known as the “South East”) will also be helpful and will be interesting to see how that affects single or two person businesses.
  • VAT increase to 20% – could have some cash flow implications for smaller recruiters but providing decent credit control is in place it should not be an issue.

Turning to the real impact on Contractors I think we can say that it is relatively good news at that level (in other aspects it depends on your view on alcohol taxation etc and some of the proposed welfare cuts). I think the general view is that Umbrella contractors will get some benefits and those operating through Limited Companies will also feel some improvements.

  • Umbrella contractors will benefit from an increase in personal allowances to the tune of £1000 and with an increase in the employers NI threshold, the nett position should be an improvement. But what about the rise in VAT I hear you cry! Well, if you claim valid business expenses (and perhaps even more a reason to do so now) then you should be better off. If you’re an higher rate tax payer it could also mean that if you claim expenses and with an increase in allowances, your tax position could be better. The caveat is of course that the expenses must be legitimate and as everyone knows, we do not promote the abuse of this.
  • The reduction in small companies taxation to 20% will also be well received by small business and this will be the case for those operating a Limited Company. Those same companies may also benefit from those changes in employers NI and the commitment to review small business taxation (which includes ir35) is to be welcomed.
  • For some contractors, the increases in capital gains could be a pain if you have an extensive property portfolio but for those that are building up say a consulting business, the entrepreneurs relief improvement is of course welcome.

So – a generally pro Contractor budget in my opinion. It won’t be perfect for everyone but for those of us trying to get on and create some opportunities for ourselves and others, it sounds ok.

Budget – what’s in it for Contractors?

June 22, 2010 in Contractor News, Freelancing, Industry comment, Life, Recruiter News, Tax

You can get live updates via twitter by following http://www.twitter.com/robborover as we discuss the impacts for Umbrella and Limited Company contractors from 12-30PM onwards today.

Will ir35 be mentioned? Will changes in corporation tax be too harsh?

Interesting times ahead – ir35 to go?

May 24, 2010 in Contractor News, Freelancing, Industry comment, Life

So the dust has settled (for now) and our new masters are setting about making the changes they believe are necessary to improve our economy and improve our lot.

In the recently published coalition document there were probably two of three key specific Contractor related matters that come to mind:

  1. IR35 was mentioned along the lines of tax simplification;
  2. Public cuts;
  3. No mention of Agency Workers Regulations (AWR).

For me IR35 and tax simplicity for Contractors is all about “certainty”.  As drafted, IR35 is subjective and, therefore, using the same set of facts two different views can be taken.  If the legislation was clear and could provide a series of specific tests that then produced a balanced answer and that answer met a criteria level then taxpayers, advisers & HMRC would save a lot of time and certainty would be gained for all.

Cuts – I think that in the short term, public spending cuts may have an impact as certain Government department are forced to reduce temporary headcount and then permanent. Once that round is over, guess where they will probably go to then ensure key projects are then delivered?

I don’t agree with some commentators views that AWR will be removed or stopped. This is European wide legislation and therefore cannot be simply put to one side. It may get some guidance updates (welcome) but I can’t see it going!

Let’s hope the new government can address some of the issues that the flexible workforce faces as in my opinion, they are a crucial part of the UK’s recovery process.

The Ten Year Blog Post

March 31, 2010 in Contractor News, Freelancing, Industry comment, Life, Recruiter News

Ten years ago myself and Mark O’Brien along with some investment and support from our local accountants (Livesey & Spottiswood) started Parasol. We planned it in late 99 and by February 2000 we were ready. We started properly trading on 1st April 2000 and I spent that Easter putting the finishing “touch” to our first online timesheet portal. Written in perl (don’t ask but that link explains all!) it started the journey and it’s been a great journey since then.

I would like to thank all past and present Contractors for their support and custom, wouldn’t be much without you. We have also worked with many excellent Recruitment Businesses and their part in our journey also cannot be overlooked.

In that time we have looked after over 35,000 people and safely transacted over £2 billion pounds of Contractor income. There have been some lows (if you were around in April 2006 with a system change!) and there have been plenty of highs. We have remained focused on improving customer service, being efficient as possible (goes back to day one) and I am very proud of all the awards we have won as they are a testament to the hard work all the past and present Directors, managers and employees have put in. The biggest thank you should go to them.

Another milestone in the Parasol journey was in October 2006 when I completed a management buy-out that allowed our previous investors (and Mark) to exit the business and for a new impetus to start. I am grateful to Inflexion private equity for backing me and the team then, and for HSBC in supporting the transaction. We have since been able to invest in better systems and increase our capabilities. Late 2008 we added Quay Accounting to our family which we subsequently rebranded to Clearsky Accounting - our Limited Company accounting specialists.

2010 sees us looking at new opportunities and we are very well placed to make the most of these. The Parasol Group is proud of its accomplishments but is not standing still, can’t wait to reflect on the next ten years in 2020!

Thank you all for your support,

Rob.

Cloud Computing or 1996?

March 2, 2010 in Geeking, Life

I attended a salesforce.com seminar today and whilst I fully understand the cloud advantage and total cost of ownership model I did have to laugh at some of the sales presentation techniques used. Back in 1996 I had a brief career selling Helpdesk software and our client/server solution featured field level name changing and a few other bells and whistles. Fast forward to 2010 and “the total configurability” of salesforce.com is great for web 2.0 applications but average for client/server comparisons. Looks like we might be stuck with PC’s for a while longer and no doubt browser based applications will come on but in many ways we have had to go back to go forward.

Seasons Greetings

December 18, 2009 in Contractor News, Freelancing, Industry comment, Life

I would like to wish all Parasol Group contractors a very Happy Christmas and a prosperous New Year.  We hope that despite the challenges, 2009 has been successful and we are busy working hard on new solutions for 2010 and continuous improvement in all that we do.

I found out today that since Apil 2006 to March 2009, we have pushed over £1 Billion pounds of contractor income through our business, sometimes you have to step back and say, wow! I hope you would also join me in recognising the great work that the head office team complete on all our behalf’s, thanks.

I hope you and your families have a good break (if possible) and we look forward to working with you in 2010.  I will leave you with a serious picture of that same head office team:

The Team hard at work

The Team hard at work