Monthly Archives: July 2019

Hot Business News Today

Whitehall fails its own test, rewarding outsourcers who pay SMEs late

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Originally written by Timothy Adler on Small Business
Whitehall has repeatedly flunked its own test for dropping large government outsourcers who fail to pay small business subcontractors on time.
Under plans coming into force in September, outsourcers which fail to pay 95pc of subcontractors within 60 days risk being frozen out of public-sector procurement, which is worth £60bn a year. The rules will apply to all Government contracts worth more than £5m. As of now, four-fifths of Government outsources would be excluded from bidding on contracts.
However, according to research by Tussell, a data provider on UK government expenditure, Whitehall has rewarded large outsourcers over 200 contracts, despite them have already failed the 95pc threshold. The combined contracts were worth £90bn.
The Ministry of Defence has been the worst culprit; out of 154 contracts worth more than £5m awarded since 2015, 60 have gone to suppliers which did not meet the 95pc threshold.
The Department for Transport also had a poor record: it gave big contracts to 36 suppliers which did not meet the threshold, from a total of 75.
The Department for Work and Pensions has awarded 25 contracts to late-paying large outsourcers since 2015.
Late payments force 50,000 small businesses to shut every year.
Mental health

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Hot Business News Today

How UK businesses should cope with incoming IR35 rules

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Originally written by Timothy Adler on Small Business
With the IR35 rules being reformed within the private sector from April 2020 (essentially mirroring the changes introduced to the public sector back in April 2017), there is a great deal of uncertainty, not only about how the rules will work, but also how employment businesses will practically operate the new legislation.
IR35 puts the onus for deciding whether a freelance contractor is truly freelance or a full-time employee on the recruitment agency. HMRC is on the lookout for what it considers “disguised employment”.
The controversy is that contractors who are considered to fall within IR35 are taxed as an employee, often at the higher rate of income tax, but do not get benefits like paid annual leave or sick pay.
Additionally, employment businesses will be responsible for deducting income tax and employee’s national insurance contributions (NICs) from fees paid, regardless of whether their client pays its bill.
With less than 12 months to go until these changes come into force, it is important that employment businesses who engage contractors through personal service companies (PSCs) understand what practical steps they can take now to prepare in advance.
How to prepare in advance:
Contact current PSCs
Employment businesses should liaise with

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