Posts Tagged ‘EU’

After several months of consultation with industry representatives, the government finally laid before parliament the regulations to implement in the UK the EU Agency Workers Directive. The timing is to make good the government’s pledge to get the regulations on the statute books during the current session of parliament. However, they do not come into force until October 2011, which will supposedly give all those affected the time to make preparations.

The Agency Workers Directive aims to protect temporary workers, who are deemed to be ‘vulnerable’, by granting them the same rights as full-time employees after they have worked for a company for twelve weeks. The consultation period has predictably seen the trades unions push for full protection while industry representatives have been arguing for light regulations. Although the latter generally welcome the delay in implementation, they are concerned that they have been unable to comment on the final regulations, which are considered to have many inconsistencies.

In particular, those who are classed as ‘genuinely self-employed’ are to be excluded from the regulations. This applies to those with limited companies but not contractors who operate through an umbrella company. Agencies do, understandably, welcome the decision not to impose restrictions on agency fees that are thought to be unreasonable. There is also the question of who will stand the £1 billion a year estimated cost of the regulations, with the suspicion that it is the contractors themselves who will ultimately be hit.

Industry representatives now seem prepared to wait and see the detail of the regulations before coming to any firm conclusions. They also appear intent on seeking clarification of points that concern them and working with the government on the guidance documents that determine how the requirements will be interpreted. However, these things tend to be difficult to stop or divert once they’re set in motion and even a change of government may make no difference.

Contact UKContracting.net to make sure you’ve got the most suitable working arrangement and limit any harmful effect of the Directive.

Unless you’ve been locked away with no access to TV or newspapers for the last few months, you’ll know that VAT returned to its pre-crisis rate of 17.5% on 1st January. So, if you’re a VAT registered contractor, you need to ensure you show the correct VAT rate on your invoices. Also, if you’re on a flat rate scheme, the rate you’ll use will change (from 11.5% to 13% for IT contractors). There are some less well-publicised changes that you also need to be aware of and these, as you’d expect, involve some extra work.

Any of you with a VAT-exclusive annual turnover of at least £100,000 will be obliged to submit returns and pay due amounts electronically from 1st April. Those who register for VAT from this date will also have to submit and pay online irrespective of their turnover. However, this shouldn’t affect you tech-savvy contractors who obviously don’t send paper forms and cheques through the post.

Of more concern are changes that come into effect from 1st January for those with European dealings. The need to complete and submit sales lists has been extended to the supply of services as well as products to EU companies. You’ll have to complete a quarterly return that shows the value of supplies and the customer’s VAT number, and you’ll need to do this within 14 days of the quarter end (21 days if submitted electronically) as against the 42 days allowed previously.

There are a couple of changes that make life a little easier. The first of these concerns the rule that VAT is charged to the customer in the place where it is established. This means that you didn’t charge VAT to EU customers providing you knew the product or service would be used for business activities. Now, you only need to be sure that the customer is in business (obtaining their VAT registration number will do this) to provide a VAT-free supply.

The second change applies to those working abroad who previously had to reclaim incurred VAT from the state where they worked — a long and frustrating process that could take years. The new procedure is that claims go through HMRC, which passes the refund request to the member state. Payment should be received within four months, or eight months if more information is needed, with interest due on late payments.

Contractors affected by the various changes need to be aware that late submissions will result in penalties. However, HMRC has promised to take a lenient approach in the early months. Signing up with UKContracting.net will ensure you’re fully aware of all the latest changes in legislation and avoid getting into trouble.

We’ve all heard the warnings about the internet in general and social networking in particular. Be careful what we post on there, we’re told. Don’t record personal and private information because our identity will be stolen, our bank accounts emptied and we’ll end up on the street with nothing. We IT sophisticates have, of course, ignored all this because we know what we’re doing and we won’t fall victim to any scams like the computer illiterates of this world.

Now our confidence is looking a little misplaced with the news that Facebook has changed its default security settings. The outcome of this is that everything you posted that you thought would remain private may now become much more available. The upsetting thing for many users is that Facebook has unilaterally changed the agreement, which is hardly what a site that’s all about building relationships should be doing.

The belief is that Facebook, having existed as a free service that makes its money from adverts, is now going to cash in its investment by selling some of this information. This does mean that you should be checking your entry, and not just on Facebook, to make sure there’s nothing there that you don’t want to become public. However, if it’s already recorded, this might be a case of shutting the stable door after the proverbial horse has disappeared over the horizon.

The development is probably not the best of ideas at a time when companies are increasingly looking at social networking to promote their business. Firms are generally more security conscious than individuals and will have second thoughts about dealing with a site that’s perceived to be too free with information. Other users might be tempted to jump ship although there’s no guarantee they won’t finish up in the same situation elsewhere.

The Electronic Privacy Information Center in the US has filed a complaint with the Federal Trade Commission, claiming the changes to privacy settings are unfair and deceptive, violating federal consumer protection law. Closer to home, the EU has several pieces of legislation going through the process that aim to protect users’ rights online. However, the data might be out there before the legal wheels have turned fully.

As we slowly emerge from recession, the world is a different place on the other side. So you need to know how it’s changed and adapt to the new order if you’re going to take advantage of the opportunities.

Flexibility is the big emphasis and you need to be prepared to react. Money has been tight for some time and budgets have been kept firmly under control, which isn’t a situation that’s likely to change quickly. As a result, investment will be more closely focused, leading to companies concentrating on project-based assignments rather than long-term contracts. The result is you might have to be prepared to move around more often and so the next contract could be something you have to plan earlier.

Employers will be looking for value for money and so will want quick results that are easily measured. This will inevitably lead to a greater level of accountability and reporting through the course of a project. The quest for value may also result in more projects going offshore to get lower labour costs, although the need for high-quality work on complex developments may influence what is possible.

Cost savings may prompt firms to outsource larger segments of their business, especially non-core activities, which may open up more opportunities. As ever, having the right skills will help. In the brave new world of 2010, this is likely to involve anything concerned with the environment and sustainability, cloud computing, mobile applications, social media and banking, with the latter having to adjust to new regulations resulting from the financial crisis.

One change that’s nothing to do with the recession is the EU Agency Workers Directive that allows contractors to negotiate with employers directly once the initial contract ends. This lets you sort out any renewal without the agency being involved, providing you don’t opt out of the regulations.

While things are likely to be improving, they won’t be the same as before and you need to be prepared for the change. One way is to be sure you have the best business structure to operate efficiently, so contact UKContracting.net to get the best advice about this.