So... Gordon Brown has finished his triumphant budget speech, ending with a cut in the standard rate of income tax from 22% to 20% from next year - a tactic normally reserved for budgets before a general election, but welcome none-the-less.
However for an IT Contractor following the industry standard practice of working through their own ltd company, the news is less Rosy.
It has been well known that the government has been planning to crack down on various methods of legal tax avoidance - but today Brown announced an increase of 2% in the rate of Small Business Corporation tax (tax on profits of £50 to £300k per annum) from 20% to 22% by 2009. This measure has been specifically put in place to target individuals working through their own limited companies and to bring them more in line with those paid via PAYE but will affect ALL small businesses.
We pay IT contractors in a variety of ways depending on their preference with methods including full PAYE and the more standard method, in the IT world, of paying on receipt of their Ltd company invoices.
While we cannot hide from tax increases it is worth bearing in mind the still legal and effective schemes to help contractors claim back expenses, boosting their tax-free income. One company I work with to provide this service is Cash Simply, who have a product called "Gain Advantage" - I always offer this as an option to all new contractors.
Another possible way forward to this is an Umbrella company that seems to tick all the boxes for compliance called "Work 2 Live." I met Laura Beardsley at the last Recruiters Network event and remained sober enough to understand her business proposition :-)
For more info on Gain Advantage get in touch with me anytime. To check out what Laura's company can do to help - try www.work2live.co.uk
PS: - Gordon's stuck the rate of road tax up too - do any of you know how to run a petrol-engined car on recycled garden waste or will I have to wait for the "Mr. Fusion Home Energy Reactor" from Back to the Future?
Cheers
G
Wednesday, 21 March 2007
Friday, 16 March 2007
My inaugural ReadyPeople post!
Hello World!
Thought it was about time I got myself blogging…
As MD of ReadyPeople, when meeting potential new clients, I often try and explain how an SME-sized recruiter can compete with the “giants” out there. Nearly everything we do has come to us via recommendation - but this is still a point that is often raised. One of the key things I believe in and instill in the team, is that you must be an industry expert in your area - ReadyPeople only do IT Recruitment - but that is a broad church, and our recruiters need detailed knowledge of the sector and to have gained their own IT industry experience before I will consider working with them. So - apart from above average industry experience - what else differentiates a company like ours from the “mainstream”. One of the answers arrived in my inbox this morning - a copy of the latest Plimsoll report into recruitment (the article below is from Recruiter Magazine’s web site today) -
A group of lean, fit and relatively small companies are taking the recruitment industry by storm and showing the bigger players how it’s done, according to a report by business analysts Plimsoll Publishing.
It says these companies are reporting increasing sales at three times the rate of their larger competitors, are delivering four times the profitability, and are showing five times the return on investment.
Plimsoll says price deflation is hitting the bigger companies where it hurts – in their pockets. It found that at 19 of the top 200 recruitment agencies are losing money, while 30 are making less profit than last year. Salaries alone at the top 200 recruitment agencies eat up 13% of sales, in general they pay their staff more and are less productive, it found.
However, Plimsoll says the new kids on the block are nimbler, slicker and more efficient. Senior analyst, David Pattison, says: “19 of the bigger companies are displaying symptoms of extreme tiredness. But the big companies are desperate not to miss out on the new profit and growth areas, so they are busy hunting down the emerging firms.”
Hmmm… “the new kids on the block are nimbler, slicker and more efficient” - that will do for me
www.readypeople.eu
Well thats the end of my brief inaugural blog
thanks for taking a look
Gerald
Thought it was about time I got myself blogging…
As MD of ReadyPeople, when meeting potential new clients, I often try and explain how an SME-sized recruiter can compete with the “giants” out there. Nearly everything we do has come to us via recommendation - but this is still a point that is often raised. One of the key things I believe in and instill in the team, is that you must be an industry expert in your area - ReadyPeople only do IT Recruitment - but that is a broad church, and our recruiters need detailed knowledge of the sector and to have gained their own IT industry experience before I will consider working with them. So - apart from above average industry experience - what else differentiates a company like ours from the “mainstream”. One of the answers arrived in my inbox this morning - a copy of the latest Plimsoll report into recruitment (the article below is from Recruiter Magazine’s web site today) -
It says these companies are reporting increasing sales at three times the rate of their larger competitors, are delivering four times the profitability, and are showing five times the return on investment.
Plimsoll says price deflation is hitting the bigger companies where it hurts – in their pockets. It found that at 19 of the top 200 recruitment agencies are losing money, while 30 are making less profit than last year. Salaries alone at the top 200 recruitment agencies eat up 13% of sales, in general they pay their staff more and are less productive, it found.
However, Plimsoll says the new kids on the block are nimbler, slicker and more efficient. Senior analyst, David Pattison, says: “19 of the bigger companies are displaying symptoms of extreme tiredness. But the big companies are desperate not to miss out on the new profit and growth areas, so they are busy hunting down the emerging firms.”
Hmmm… “the new kids on the block are nimbler, slicker and more efficient” - that will do for me
www.readypeople.eu
Well thats the end of my brief inaugural blog
thanks for taking a look
Gerald
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