One evening, in Cape Town, I stepped into the living room of a friend of mine, a very talented film director. It was, I think, a summer’s evening and the other guests had already arrived.

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The new UK government rolled out the first of its changes aimed at limiting the amount of non-EU workers travelling to the UK for work and . A temporary cap limiting the number of non-EU workers coming into the UK, will come into effect between now and April 2011. The mechanisms

designed by the new UK government and implemented by the UK Border Agency (UKBA) to limit this category of migrants are separated into two of the points based sections, these being Tier 1 and Tier 2 (General) visas.

Tier 1 Visas will be limited in the following ways

• An increase in the points you need to score from 95 to 100.
• A quota that restricts the number of Tier 1 visas that can be issued between now and April 2011, 5400.

These two measures have been introduced as of 19th July 2010. The quota of 5400 Tier 1 visas that can be issued between now and April 2011 equates to roughly 635 Tier 1 visas available to be issued each month by all British High Commissions (BHC) around the world.

In the 08-09 UK financial year an average of 204 Australians and 92 New Zealanders applied for entry clearance per month through the BHC in their home countries. Comparatively in the same period of time there was an average of 972 applications received each month through the BHC in India. Globally there were a total of 34,460 applications received in the year, an average of 2871 per month.

Simple arithmetic shows that should there be the same level of demand for this visa from around the world the possibility for many people to miss out on the opportunity to live and work in the UK on the T1 visa is very real.

So, what does this mean for Australian’s and New Zealanders wishing to relocate to the UK?

According to 1st Contact’s registered migration agent Melanie Pitt, those wishing to relocate to the UK for career motives on the Tier 1 visa should act sooner rather than later to avoid disappointments further down the line.

“Given the monthly quota system and the way in which valid applications not issued in one month, because of limits being reached, are then held over until the start of the following month a major backlog could develop. It is entirely possible that closer to January of next year we could find ourselves in a position whereby at the start of each month all allowable Tier 1 allocations are exhausted immediately due to those valid applications waiting in the queue for the monthly quota to open.”

Over the last few years the use of Umbrella Companies has become more popular within the contracting market.

Umbrella Companies are popular because they take the hassle out of tax and administration responsibilities. You simply register online with your chosen Umbrella service provider. To complete your registration you will need to send in a copy of your passport and visa and your P45 or P46.

Once you are a registered client, you simply log your timesheets online and send in expense claim forms. It’s that simple. Your Umbrella Company takes care of all the administration including processing your payment after making the correct deductions and paying the correct taxes to HMRC. This leaves you free to focus on finding those opportunities and doing the work.

But how can you be sure you are entrusting your hard earned money to the right Umbrella Company?

Deon Smit, 1st Contact Umbrella Manager, offers these 10 tips for selecting the right Umbrella Company to partner with:

Experience

Only consider an Umbrella Company that has been in operation for a number of years. 1st Contact has been assisting contractors with payroll services since 1996. Be wary of any new companies as you run the risk of losing all your money to a fly-by-night operator.

Reputation

It’s all good and well if a company has been operating for years; but what if they’ve been operating badly? Scour the net for blogs and information and speak to longer established contractors about their experiences with Umbrella Companies – the good, the bad and the ugly.

Easy online system

Make sure that your Umbrella service provider has a simple online system that you can easily manage. There’s no point in using an umbrella provider to avoid admin, only to have to spend hours figuring out their complicated registration and submission systems.

Personal service

As important as an online system is, make sure that when you need to speak to a real, live person, one is available to you. 1st Contact Umbrella provides a free consultation with a professional consultant and their telephone lines are open from 8am to 5pm Monday to Friday. They also make it their business to answer all payroll related email queries within 3 working hours.

Fee structure

It is extremely important that you establish upfront that there are no joining fees and no exit fees. Ask the Umbrella Company to provide you with a full schedule of fees to ensure that you aren’t overcharged.

Insurance

What happens if your service provider goes bankrupt? Always ask about the insurance policy to be 100% sure that you will receive your money, no matter what. Your Umbrella Company should have public liability, employers’ liability, and professional indemnity insurance cover.

Expense policy

Some companies may claim an extensive claims policy, but the conditions attached are so extreme that the likelihood of you actually claiming is pretty slim. Do your research and ask as many questions as possible. Avoid any company that states that you don’t need to prove your expense claims – if HMRC does query your expenses and you cannot provide the necessary receipts, the tax liability could fall on you.

Employee benefits

Does your Umbrella Company give you the option of employee benefits such as sick leave and maternity leave? Well established companies like 1st Contact Umbrella can offer you fantastic employee benefits while you enjoy the freedom of working for yourself.

Payment dates

Does the scheme have fixed payment dates you can rely on? Be sure to find out what the payment methods and schedules are and make sure the answers are not vague. You want to know exactly what their payment policy is, so that you have recourse should the timelines not be met.

Relocation costs

Lastly, find out about other benefits. For instance, with 1st Contact Umbrella you can claim relocation costs if they are your first employer when you arrive in the UK. You could be in a position to claim the costs of your flights, shipping, 6 weeks’ accommodation. In fact, up to £8000 could be claimed to give you a tax benefit and in turn increase you net pay. Terms and conditions do apply, but this is a fantastic benefit you are not likely to see elsewhere.

We hope these tips have been of use to you. If you have any questions related to contracting in the UK, Umbrella Companies or the setting up of a Limited Company, visit www.1stcontact-umbrella.com or speak to an experienced and professional consultant by calling 0808 178 8634.

1st Contact Umbrella has successfully assisted over 100,000 clients with our no-hassle, efficient payroll service.

The Chancellor of the Exchequer presented his Budget to Parliament on the 22nd of June 2010 – a budget which brought spending cuts and tax rises, which according to the Chancellor are necessary in order to deal with the “economic inheritance” the new government faces and help to speed up economic recovery for the UK.

For businesses and their owners, the budget brought with it some good news and some bad news, as summarised below:

Corporation tax

Small businesses (companies with profits of less than £300,000 per annum) will benefit from a reduction in the Small Profits Rate of corporation tax, decreasing from 21% to 20% as of April 2011.

The standard rate of corporation tax will also decrease to 27% from April 2011. This decrease will be followed by a 1% annual reduction every year over the next 3 years, to reach 24% by April 2014.

VAT

The standard rate of VAT is to increase to 20% from the 4th of January 2011, while sectoral rates for the Flat Rate scheme will increase at the same time. There will be no change to zero-rated and exempt items.

Capital gains tax

The annual exemption of £10,100 will remain unchanged for the foreseeable future. The tax rate for basic rate payers remains at 18%, while the rate for higher rate taxpayers increases from 18% to 28% from midnight 22 June 2010. A further change is that entrepreneurs’ relief at 10% will be extended from the first £2 million of gains to the first £5 million.

Income tax

There will be a £1,000 increase in Personal Allowance for tax to £7,475 with effect from April 2011, while the higher tax/NI rates will kick in sooner to offset the Personal Allowance increase for higher earners.

National Insurance

The increase in employers’ NI contributions will not go ahead as planned. Instead, the threshold for employers’ NI contributions will rise by £21 per week above inflation.

Small businesses in certain areas, set up over the next 3 years, will be exempt from the first £5k of employer’s NI on up to 10 employees’ wages.

For advice related to your small business’ tax issues, speak to a 1st Contact finance consultant by calling 080 8141 1657 or email info@sablewealth.com.

If your application for further leave to remain was recently refused or if you have been refused on grounds of maintenance only, a recent court ruling could make it possible for the decision in your case to be overturned!

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If you are a provisional taxpayer, please note that SARS has introduced a few changes in the way in which you will fill out your IRP6. These changes came into effect on the 28^th of June 2010. Continue Reading

If London is calling you and you’re at any stage of making the big move, these 5 resources can help you to make the right decisions even before you leave…

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1^st Contact recently spoke about the UK Immigration cap on South Africa’s eTV News.

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London is an exciting place, we all know that. You’ve heard so many pieces of advice and opinions about the place, but can it all be true? What’s London really like? Follow these 100 London Bloggers and get the real deal.

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Prior to the election, David Cameron took a tough line on immigration, vowing to bring annual net migration figures down from about 170,000 a year to just “tens of thousands”. At the time, the Liberal Democrats attacked proposals to cap immigration, but have since agreed to back the policy as part of the Government’s coalition deal.

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After a decade of what has been considered by many to be an extremely unfair and complicated tax law, the new UK government has promised to review and replace the IR35 legislation.

IR35 was first implemented in 2000 as a way to close a tax loophole which allowed contractors to pay reduced tax and NI by offering their services through a limited company. In some instances, contractors were on permanent contracts or recurring contracts – basically working full time for a single employer. This was viewed by the governement as tax evasion, and IR35 was introduced. Unfortunatley genuine contractors were also placed under IR35 legislation, effectively treated as tax evaders and taxed heavily on their freelance income.

“It would  be great to see this piece of legislation removed. It created an enormous amount of confusion, and was never the viable solution it was intended to be” says Raymond Ridgeway from 1^st Contact Umbrella.

“The government has said that it would “seek to replace it [IR35] with simpler measures that prevent tax avoidance but do not place undue administrative burdens or uncertainty on the self-employed, or restrict labour market flexibility.”

A clear cut piece of legislation will help hundreds of thousands of contractors to know and understand where they stand with regards to their tax. Businesses like 1^st Contact Umbrella will also be able to  to provide consistent, clear-cut answers to their clients. We look forward to seeing what happens and welcome the change!”

This month, we’re looking at the best people to follow on Twitter, if you’ve just landed in London.

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If you’ve never visited South Africa and you’re heading down (or up if you’re in Australia or New Zealand) for the FIFA World Cup, this guide should help to give you a better idea of what to expect as well as a few tips for a safe and enjoyable stay! Continue Reading

With a million Apple iPads sold within the first few weeks of its launch, it’s time to look at ten of its applications and how you could be using them to find a new career, chat with friends and work with your money.
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If you’ve considered uprooting yourself and living and working in London, perhaps this will be the year you finally take the plunge… Continue Reading

Prior to the UK election results, the Conservatives leader, David Cameron, and Liberal Democrats leader, Nick Clegg, clashed over their intended Immigration policies. Continue Reading

1^st Contact, the global finance and immigration group with a growing reputation for excellent customer service, is once again expanding its range of services. This time, they’re adding legal services into the fold with the imminent launch of 1^st Contact Law, a fully fledged UK-regulated law firm. Continue Reading