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New research indicates that one-in-five UK sole traders are preparing for the upcoming changes to off-payroll working rules in the private sector, despite the fact that the legislation will not affect them.
Completed by the Freelancer & Contractor Services Association (FCSA) professional body and cloud accounting software provider FreeAgent, the research found that 18% of sole traders were making preparations for the new rules when they would not affect their business type.
Ahead of reforms to private sector IR35 rules, new research shows that several public sector organisations are, in the majority of cases, judging contractors to be inside IR35.
Since 2017, public bodies have been responsible for deciding whether a contractor is truly self-employed or whether they should be taxed as if they were an employee of the firm.
The rules apply to limited company contractors who, before the rule change, were responsible for judging their own IR35 status.
From April 2020, the same reforms will be introduced in the private sector, so that organisations with 50 or more employees will be responsible for judging a contractor’s IR35 status.
HMRC has launched a fresh consultation on changes to off-payroll Intermediaries Legislation (IR35), due to take effect in the private sector from April 2020.
The changes would see reforms introduced in the public sector in 2017 extended to the private sector.
The change will affect contractors that operate through an intermediary like a limited company or personal service company (PSC).
Instead of judging their own IR35 status, the private sector organisation that engages the contract will make this decision. It could mean that more contractors are deemed ‘inside IR35’ and liable to pay income tax and National Insurance contributions.
If you contract through a limited company, there are certain expenses that you can claim against your income to reduce your tax liability.
If your limited company makes £50,000 and you claim back £10,000 in allowable expenses, the taxable profit will be £40,000.
There are some rules governing what expenses limited company contractors can claim.
The Treasury released new guidance on off-payroll working (IR35) in the private sector yesterday, following the Chancellor’s Budget speech.
Following a consultation on the rules, some commentators expected IR35 reforms to take effect from next year. But the policy paper reveals that the changes will be introduced in April 2020, giving businesses more time to prepare for the reforms
We’ve combed through the policy document, picking out the key points so you can understand how the changes will affect you.
After wrapping up their tax affairs for the 2018/19 tax year, many limited company contractors will only now be waking up to the reality of the 2018 dividend allowance cut, which saw the tax-free dividend allowance drop from £5,000 to £2,000.
In 2018/19, this tax-free allowance was applied to the first £2,000 of dividend income. Above £2,000, dividends are taxed at a flat rate according to the tax band they fall into.
Large and medium sized private sector organisations have just over a year left to prepare for important changes to IR35 legislation.
When similar changes were introduced in the public sector in April 2017, many organisations were woefully underprepared. In the most serious cases, public sector organisations made costly errors and saw major projects delayed.
Getting ready for April 2020 requires effective leadership and co-operation across departments and business areas.
In this blog post, we will provide a brief introduction to the changes before detailing what different teams can do to prepare.
Is your New Year’s Resolution to start working for yourself? You aren’t alone.
January is one of the busiest times for new company registrations as skilled workers target the money and freedom that can come with contracting.
But setting up isn’t easy. There are a lot of things to think about and if you plan your contracting journey properly now, you can save yourself several headaches down the way.
Delivered by Chancellor Philip Hammond on Monday, the 2018 Budget was another important one for contractors.
In this blog post, we look at some of the most important announcements and how they will affect contractor pockets.
More questions have been raised about the reliability of HMRC’s Check Employment Status for Tax (CEST) tool, after a judge rejected one of the tool’s assessments.
A contractor managed to reclaim thousands of pounds in overpaid tax after the CEST tool’s ‘inside IR35’ ruling was challenged in an employment tribunal.
At first, the contractor known as Mr Elbourn went to the tribunal to try and claim back employer’s National Insurance contributions, which he thought had wrongfully been deducted by an employment agency.
