Not only are the Off-Payroll rules an overly-burdensome and unjust amendment to IR35, they also have a toxic impact on the previously amicable relationship between businesses, agencies and the self-employed. What HMRC introduced in a wanton effort to increase IR35’s tax yield threatens to destroy the supply chain dynamic and considerably damage flexible working in the UK. A real-life realisation of Karpman’s drama triangle Off-Payroll pits contractors, clients and agencies against each other. By giving clients and agencies compliance obligations, and a significant degree of risk, the taxman has manipulated IR35 so that, rather than do right by the contractor, these parties are more inclined to act in their own […]

In the House of Commons last week, Gregory Campbell, who is Shadow DUP Spokesperson for the Cabinet Office asked “if [the Chancellor of the Exchequer] will make an assessment of the implications for his tax policies of the conclusion of the report entitled the BBC’s engagement with personal service companies, published by the National Audit Office in November 2018.” Mel Stride, Financial Secretary to the Treasury and Paymaster General commented as follows; “The National Audit Office (NAO) report concerns one organisation’s use of personal service companies over the last two decades, concluding with its experience of implementing the April 2017 reform of the off-payroll working rules in the public sector. The […]

2019 stands to be the most important year in the history of IR35, and one which will shape the future of flexible working in the UK. If HMRC and Government’s aspirations for an extension of the Off-Payroll rules into the private sector are realised, 6 April 2020 will likely be the date that cataclysmic legislative change affects contractors and UK plc. The Off-Payroll rules threaten a colossal reduction in workforce mobility and access to key skills, in addition to substantial administrative and cost burdens for those required to assess and process income for contractors. The fallout of this threatens to leave an indelible mark on the contracting sector and UK […]

Benefits of operating through a limited company and the difficulties that come with it. Being a limited company contractor is a step many contractors decide to take, whether they are entering the world of self-employment for the first time or have been doing this for quite some time as a sole trader. Being a contractor through a limited company comes with its advantages, however it does present some drawbacks at the same time. ADVANTAGES   Although there are several ways of contracting as a self-employed individual such as going through an umbrella company, contracting via a limited company is more tax efficient overall. Whilst Umbrella companies will usually deduct PAYE […]

Many contractors are unlikely to be thinking about their tax affairs during the festive season. There are far more interesting things to worry about, such as what to wear to the Christmas party, buying Christmas presents, and outdoing the neighbours with the most outrageous Christmas lights.   It’s a very sociable time of year and although you might not like to think too much about your IR35 status, using the most sociable time of year to do some networking and speaking to some like-minded individuals could be hugely beneficial to your IR35 status for the New Year and once IR35 reform is implemented within the private sector in 2020.     […]

There was much debate in the House of Commons on the 20th November regarding the 2019 charge on tax avoidance related loans. IR35 was also mentioned as another example of what was argued by many MPs as an unfair tax on its constituents, and the severe consequences of the effects of such legislation. The 2019 Loan Charge has been introduced by HMRC to recover unpaid taxes by people who have used disguised remuneration schemes involving loans since 6th April 1999 and will be introduced in April 2019. It is a retrospective tax that will treat all loans received from “disguised remuneration” as taxable income, and as if all of that income had […]

It feels like no matter how much Making Tax Digital for VAT is discussed, there is always a big question mark hanging over it. Even with HMRC’s recent awareness campaign, the House of Lords last month recommended for the transition to MTD from April 2019 to be postponed. Leading tax bodies like the Association of Taxation Technicians (ATT) are backing the Lords, believing that many small businesses simply are unable to be prepared because of the knowledge gaps that exist.  While a delay is not out of the question, there will certainly come a day when businesses will be required to submit their tax digitally. And so contractors, clueing up on MTD […]

A House of Lords report has condemned HMRC’s efforts in tackling tax avoidance and evasion, while calling for Government to establish a review of the taxman’s powers to ensure future fair treatment of taxpayers. Launched by the Economic Affairs Committee, the report, titled The Powers of HMRC: Treating Taxpayers Fairly, urges Parliament to rethink how it holds HMRC and the Treasury to account for the fair treatment of taxpayers. This, it argues, is warranted by “a compelling need to address the view that HMRC is not sufficiently accountable”, which was shared by many who provided evidence during the inquiry. “HMRC is right to tackle tax evasion and aggressive tax avoidance,” […]

December is here already and Christmas will soon be upon us with 2018 nearly at an end. The last few years have not brought the best of news for contractors, with HMRC remaining fixated on the use of personal service companies (PSCs) as a means of tax avoidance. It is clear that HMRC are not tiring in its focus on contractors, with reform of IR35 being introduced into the private sector from 2020, however this time around, HMRC have provided some time to prepare, and perhaps HMRC realise that the private sector (which represents a much larger portion of business than the private sector), will not roll over quite so […]

In its report, ‘Making Tax Digital for VAT: Treating Small Businesses Fairly’ published last week, the House of Lords Economic Affairs Committee called upon the Government to delay the introduction of MTD for VAT by at least one year from its proposed start date of 1st April 2019, because of the potential impact on smaller businesses. As many as 40% of affected businesses have not heard of MTD, let alone having started to prepare for a substantial change to their accounting record keeping and processes and therefore many businesses are simply not ready for MTD for VAT. The emerging software market appears difficult to navigate and it is also unfair […]

Not only are the Off-Payroll rules an overly-burdensome and unjust amendment to IR35, they also have a toxic impact on the previously amicable relationship between businesses, agencies and the self-employed. What HMRC introduced in a wanton effort to increase IR35’s tax yield threatens to destroy the supply chain dynamic and considerably damage flexible working in the UK. A real-life realisation of Karpman’s drama triangle Off-Payroll pits contractors, clients and agencies against each other. By giving clients and agencies compliance obligations, and a significant degree of risk, the taxman has manipulated IR35 so that, rather than do right by the contractor, these parties are more inclined to act in their own […]

In the House of Commons last week, Gregory Campbell, who is Shadow DUP Spokesperson for the Cabinet Office asked “if [the Chancellor of the Exchequer] will make an assessment of the implications for his tax policies of the conclusion of the report entitled the BBC’s engagement with personal service companies, published by the National Audit Office in November 2018.” Mel Stride, Financial Secretary to the Treasury and Paymaster General commented as follows; “The National Audit Office (NAO) report concerns one organisation’s use of personal service companies over the last two decades, concluding with its experience of implementing the April 2017 reform of the off-payroll working rules in the public sector. The […]

2019 stands to be the most important year in the history of IR35, and one which will shape the future of flexible working in the UK. If HMRC and Government’s aspirations for an extension of the Off-Payroll rules into the private sector are realised, 6 April 2020 will likely be the date that cataclysmic legislative change affects contractors and UK plc. The Off-Payroll rules threaten a colossal reduction in workforce mobility and access to key skills, in addition to substantial administrative and cost burdens for those required to assess and process income for contractors. The fallout of this threatens to leave an indelible mark on the contracting sector and UK […]

Benefits of operating through a limited company and the difficulties that come with it. Being a limited company contractor is a step many contractors decide to take, whether they are entering the world of self-employment for the first time or have been doing this for quite some time as a sole trader. Being a contractor through a limited company comes with its advantages, however it does present some drawbacks at the same time. ADVANTAGES   Although there are several ways of contracting as a self-employed individual such as going through an umbrella company, contracting via a limited company is more tax efficient overall. Whilst Umbrella companies will usually deduct PAYE […]

Many contractors are unlikely to be thinking about their tax affairs during the festive season. There are far more interesting things to worry about, such as what to wear to the Christmas party, buying Christmas presents, and outdoing the neighbours with the most outrageous Christmas lights.   It’s a very sociable time of year and although you might not like to think too much about your IR35 status, using the most sociable time of year to do some networking and speaking to some like-minded individuals could be hugely beneficial to your IR35 status for the New Year and once IR35 reform is implemented within the private sector in 2020.     […]

There was much debate in the House of Commons on the 20th November regarding the 2019 charge on tax avoidance related loans. IR35 was also mentioned as another example of what was argued by many MPs as an unfair tax on its constituents, and the severe consequences of the effects of such legislation. The 2019 Loan Charge has been introduced by HMRC to recover unpaid taxes by people who have used disguised remuneration schemes involving loans since 6th April 1999 and will be introduced in April 2019. It is a retrospective tax that will treat all loans received from “disguised remuneration” as taxable income, and as if all of that income had […]

It feels like no matter how much Making Tax Digital for VAT is discussed, there is always a big question mark hanging over it. Even with HMRC’s recent awareness campaign, the House of Lords last month recommended for the transition to MTD from April 2019 to be postponed. Leading tax bodies like the Association of Taxation Technicians (ATT) are backing the Lords, believing that many small businesses simply are unable to be prepared because of the knowledge gaps that exist.  While a delay is not out of the question, there will certainly come a day when businesses will be required to submit their tax digitally. And so contractors, clueing up on MTD […]

A House of Lords report has condemned HMRC’s efforts in tackling tax avoidance and evasion, while calling for Government to establish a review of the taxman’s powers to ensure future fair treatment of taxpayers. Launched by the Economic Affairs Committee, the report, titled The Powers of HMRC: Treating Taxpayers Fairly, urges Parliament to rethink how it holds HMRC and the Treasury to account for the fair treatment of taxpayers. This, it argues, is warranted by “a compelling need to address the view that HMRC is not sufficiently accountable”, which was shared by many who provided evidence during the inquiry. “HMRC is right to tackle tax evasion and aggressive tax avoidance,” […]

December is here already and Christmas will soon be upon us with 2018 nearly at an end. The last few years have not brought the best of news for contractors, with HMRC remaining fixated on the use of personal service companies (PSCs) as a means of tax avoidance. It is clear that HMRC are not tiring in its focus on contractors, with reform of IR35 being introduced into the private sector from 2020, however this time around, HMRC have provided some time to prepare, and perhaps HMRC realise that the private sector (which represents a much larger portion of business than the private sector), will not roll over quite so […]

In its report, ‘Making Tax Digital for VAT: Treating Small Businesses Fairly’ published last week, the House of Lords Economic Affairs Committee called upon the Government to delay the introduction of MTD for VAT by at least one year from its proposed start date of 1st April 2019, because of the potential impact on smaller businesses. As many as 40% of affected businesses have not heard of MTD, let alone having started to prepare for a substantial change to their accounting record keeping and processes and therefore many businesses are simply not ready for MTD for VAT. The emerging software market appears difficult to navigate and it is also unfair […]