Barclays contractors face 10% rate cut
Contractors working for Barclays in the UK and US have been told to accept a 10% contract rate cut, or have their contracts terminated.
According to industry sources, the new rates will come into force from 7th April, and the news represents the third time Barclays contractors have faced mandatory rate cuts in the last three years.
Contractors were informed via letter – the bank says it will ‘assume’ recipients to have accepted the new terms unless they confirm non-acceptance (and therefore termination of contract) by last Friday (14th March).
Unsurprisingly, the cut hasn’t gone down well with contractors – find out more via articles in:
New HMRC campaign targeting contractor clients
The PCG has expressed its alarm at a new HMRC campaign which targets contractor clients, by requesting detailed information on all payments made to contracting businesses under a contract for services.
According to the contractors’ organisation, HMRC has been requesting a wide range of sensitive information from clients, including the supplier’s name (and worker’s name if different), and even passport numbers.
It appears that the tax authorities have only expressed an interest in businesses which have recieved payments of £350,000 or less, suggesting that “purposely excluding large consultancies is yet another example of one rule for small companies and another for big business.”
Commenting on the news, Chris Bryce, PCG’s CEO said that it was wrong for HMRC to request such information, especially when there was “absolutely no evidence of any wrongdoing.”
“For any business, it would be incredibly damaging to have HMRC writing to their clients to insinuate that the way they are doing business may not be legitimate. For the smallest businesses, where client relationships are key, this is especially harmful.”
Budget 2014 Predictions
George Osborne will deliver this year’s Budget at 12.30 on Wednesday 19th March.
Given that we are just over a year from the next election, the Chancellor may save any ‘giveaways’ until 2015, however here are some of the predictions published by various tax experts over the past few weeks:
- The personal allowance will increase to £10,000 from April 2014 (pre-announced). Richard Rose from Accountants BDO, suggests that it may increased further – to £10,500.
- There has been much talk in the press of raising the higher rate threshold, as more and more taxpayers are forced to pay 40% tax on some of their earnings. Tina Riches, from Smith & Williamson, says the Chancellor has little scope to fund an above-inflation increase to the threshold, but may post-date increases as part of any future pre-election measures.
- Could this be an opportunity to raise the National Insurance threshold, which currently starts at just under £8,000? Tina Riches suggests that this “would be more attractive to business” than the recently implemented £2,000 employers’ allowance (which cuts the NI for employers, rather than employees).
- The main rate of Corporation Tax will fall to 21% (pre-announced) – the small profits’ rate remains at 20% (this is the rate paid by IT contractor companies).
- Richard Rose raises the possibility that the Chancellor may consider removing the entire higher rate tax relief on pension contributions, as not only would this appeal to the ‘masses’ in an election year, but would also raise over £4bn for the Treasury.