December Contractor News Roundup

Our December news roundup is here to help busy contractors like you stay up to date with all of the biggest and most relevant news stories in the industry.

£1.7million owed in employees wages

The Department for Business, Energy and Industrial Strategy (BEIS) has revealed that 260 employers have failed to pay their collective 16,000 employees the National Living Wage. Some employers were fined £1.3million for underpaying their workers.

The worst industries for employee wages were retail, hairdressing and hospitality, with common reasons including the following:  failing to pay workers travelling between jobs, deducting money from pay for uniforms and not paying for overtime. You can read the full story here. 

Low Pay Commission

Since 2013, the Low Pay Commission has identified £8 million in back pay for 58,000 workers, with 1,500 employers fined a total of £5 million. In 2017, year the government will spend a record £25.3 million on minimum wage enforcement.

In April 2018, wages are due to rise once again and will give workers the biggest pay boost in a decade. 

18% of payments to SMEs are late

Plum Consulting (on behalf of Sage) analysed a survey of over 3,000 companies across 11 countries and discovered that almost 1 in 5 invoices issued by SMEs are paid late.

Of all the countries surveyed, the UK was revealed to have one of the highest rates of non-payment, totalling £112 billion per year. An average of 15 days was spent chasing payments.

The Domino Effect

According to this research, almost 40%of Small and Medium Businesses experience direct negative impacts from late payments. In light of these results, Sage has begun to look for an intervention. However, there do not appear to be any patterns.

Petition launches to stop IR35 reforms in public sector

News about IR35 was heavily anticipated for the 2017 Autumn Budget, but nothing was set to come into effect immediately. In spite of this, IR35 changes are expected in 2018. In response, a petition, which currently has over 14,000 signatures asks IR35 not to be rolled out into the private sector.

The petition states the following: “There is evidence that the Chancellor is planning to extend IR35 legislation to the private sector in an attempt to equalise the payments and tax regimes between contractors and permanent employees.”

The government’s response

HM Treasury has since responded to assure contractors that they will be consulting on how best to tackle these issues. They stated:

“The government will consult on how to tackle non-compliance with the off-payroll working rules in the private sector, drawing on the experience of recent public sector reform.”

You can view the petition here.

Lack of digital skills holding small businesses back

New research by the Federation of Small Businesses (FSB) has revealed that over a quarter of small business owners in the UK lack confidence in their digital skills and over a fifth believe this deficit is holding them back.

The digital skills gap is part of a wider skills challenge affecting small firms, as research also found that 30% of businesses struggled to find workers due to the shortage of skills.

Stay informed

Want to read more? Keep up to date with the latest news and views on the SJD news page.