Clients call on contractors to fill strategic skills shortages

August 2014 has brought continued good news for the average owner of a contractor limited company, with the most recent Recruitment and Employment Federation (REC) JobsOutlook revealing another rise in contractor demand and contract opportunities.

As also reported on the ContractorCalculator website, client organisations' strategic skills gaps are increasingly being filled by flexible workers due to the lack of suitably qualified permanent employees. However, nine in 10 clients also expressed satisfaction with the quality of the contractors that they hired.

REC CEO Kevin Green commented: "It's clear that skills shortages are affecting the way in which employers use agency workers and increasing numbers are now relying on temporary staff to provide short-term access to strategic skills."

He forecast a continued increase in demand for contractors in line with the growth of the wider economy, given the "increasing" difficulty that firms were encountering in their search for the skilled staff required for the growth of their business.

The report suggested that there could be a shift in the contractor skills profiles required and contract lengths as a result of the focus on recruiting contractors for their strategic skills instead of for capacity management or to cover the absences of permanent staff.

The trend of contractors opting to become employees has also changed somewhat in recent times. Whereas last November, 91 per cent of clients reported seeing at least one of their hired contractors agreeing to become a permanent member of staff, by August 2014, this had fallen to a mere 55 per cent.

The report said of this sharp drop: "Employers' clear articulation of 'short-term access to key strategic skills' is contributing to this shift. Worker preference is also coming into play. Both will be contributors to this trend."

With technical and engineering contractors currently proving the most difficult for clients to source, the JobsOutlook predicted that the professional and managerial sector would be affected by similar skilled candidate shortages by 2014's third quarter.

Engineering, professional and sales personnel contractors are all expected to be in higher demand in the coming months, with the report recommending that contractors seeking work target large businesses, given their status as the most extensive users of contractors. In that regard, they were followed by small companies, and finally medium-sized firms.

Editor’s Note: SAIL Business Solutions (http://www.sailsolutions.co.uk) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.

Place of supply VAT rule changes to be clarified by HMRC

Those running a contractor limited company may be intrigued to read of new VAT place of supply rules.

The altered rules take effect from January 2015, and are relevant to all contractors and other VAT-registered suppliers of Internet services to EU customers. Any such VAT-registered firms  that would like to better understand how the rules will apply to them should contact SAIL Business Solutions, however here is a brief overview of this rule change.

The changes affect such firms - including some contractor limited companies - by switching the place of supply, and hence the taxation, for business-to-consumer supplies from the location of the supplier's establishment to the residence or location of the EU customer.

Presently, those providing services to individual consumers in the EU charge VAT based on where the service is supplied. Companies providing such services from the UK, therefore, would levy VAT at 20 per cent, declaring and paying it through their UK VAT return with HMRC.

However, from next year, if a given VAT-registered firm in the UK offers a product like downloadable software to individual consumers in the EU, the VAT that they charge must be that of the EU nation where the customer is located while downloading the service.

The need to then pay this VAT to the relevant country will mean that a UK supplier can use the VAT Mini-One-Stop-Shop (MOSS) to ascertain exactly what is payable in VAT in any of the other EU member states. In addition to collecting the VAT, this service further lessens a supplier's administrative burden by distributing it to the appropriate countries on their behalf.

For detailed information on how this issue may affect your firm, contact SAIL Business Solutions through the website at www.sailsolutions.co.uk.

Editor’s Note: SAIL Business Solutions (http://www.sailsolutions.co.uk) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.