IT contractor demand edges up despite ‘January lockdown effect’

IT contractor demand edges up despite 'January lockdown effect'

Demand for IT contractors managed to keep growing throughout January 2021, despite the UK starting the new year with a national lockdown.

In fact, the “third” UK-wide shutdown of most workplaces due to the COVID-19, amid ‘rising infection rates,’ is cited by the REC in a section of Report on Jobs on the subdued growth.

The report shows that demand for IT skills on a contract basis, was at 50.4, still kept ‘in the black’ (the index has 50.0 as its growth threshold), compared to a much more solid 55.2 in December.

‘January lockdown effect’

“Not great, but massively better than might have been expected,” said REC’s Chief Executive Neil Carberry, posting online following the RoJ’s official release last week.

“The first indication of a January lockdown effect on the jobs market… [shows] labour demand is there…[but] uncertainty is high.”

To explain the index, he characterised 50.0 as “flat” hiring activity – and the index shows that in January, the appetite for IT contractors bettered that level by 0.4 of a single index point.

‘Business confidence knocked’

“The latest national lockdown has knocked business confidence”, says James Stewart, Vice-Chair at KPMG, which co-authors the report with the Recruitment & Employment Confederation (REC).

“There has been an uptick in short-term vacancies, but these are mainly in blue-collar [sectors]…indicating that they [employers] are filling a temporary need for staff rather than pointing to long-term job opportunities.”

Last month, a white-collar career coach asked corporate inquisitors to be kinder to shortlisted Zoom candidates, “particularly at the moment when interview opportunities are so scarce.”

‘Starting-pay upturn on pause’

Furthermore, only five computer skills feature in the REC report as being on its contractor agencies’ scarce list – Development, IT, Technology, Java and Software.

Except for Java, these skills are in “short supply” for full-time vacancies too, as are Agile Project Management, Analysis; Azure, BI, CAD, Cyber, Data Science, Digital, Python, Software Engineering and Technical Management.

But regarding the prospect” for clarity of premiums attached to such scarce skills, Mr Carberry suggested candidates should not expect too much, as “the upturn in starting pay has paused”.

“However there is cause for optimism,” argued KPMG’s Mr Stewart, “as businesses carefully monitor the vaccine rollout and look forward to the Budget next month. It gives the government the opportunity to further help the recovery in jobs and revive the UK’s productivity growth.”

Who can claim?

You can claim working from home expenses if you run your business from home, or if you have to work from home on a regular basis. This can include those who have to work from home due to coronavirus.

What you can claim

You can claim expenses for the cost of running your business from home. There are two ways to do this, using a flat rate, or claiming the actual costs. The flat rate amount is £6 per week, or £208/year. You can claim this without evidence of the additional costs. The flat rate does not include phone or broadband costs, you should claim these separately.

Calculating the proportion of business costs

If you prefer, you can claim for the actual cost of running your business from home, including the proportion of specific costs for light, heat, insurance and other household costs. Government guidance states that you must use a “reasonable method” to calculate these costs. You can’t claim for costs that remain the same whether or not you worked from home, like rent, mortgage interest or council tax.

Phone and broadband costs

Whichever option you choose, you will need to claim separately for your phone and broadband costs. Claims should be based on the volume of business usage for the line/connection. You can only claim for line rental if this is exclusively a business cost – so the line/connection would have to be only for business use and you would need to have a separate one for personal use.

If business use has not increased the cost, or you cannot clearly separate your business costs from personal use, for example if data and calls are included in your package, you should not claim.

Ensuring mixed use

It’s a good idea to ensure that the area of your home that you use for business is also used for something else – for example, letting the kids use your office to play computer games at the weekend. If the space is used exclusively for business, there’s a risk that a proportion of your home could be subject to capital gains tax when you sell it.

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