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Rishi Sunak’s pared back Spring Statement contained only small crumbs of comfort for contractors and umbrella company workers.
A £3,000 increase in the threshold at which you start paying National Insurance (NI) contributions will help some low-earning employees. For many, however, this benefit will only slightly outweigh the simultaneous NI increase of 1.25%, and for some workers will only serve to reduce the loss.
New figures show that HMRC pays most of its temporary workers through umbrella companies.
However, the UK tax authority has denied that it has a partial outside-IR35 hiring ban in place.
HMRC’s accounts, which run to the end of March 2021, show that the taxman engaged 403 temporary workers in one year. Of this number, only 15 were classed as ‘inside IR35’, which means they were operating through a limited company, but paying tax and National Insurance contributions like an employee.
Last year was a challenging year for almost everyone in the UK, including umbrella workers. Many of these challenges are likely to continue this year, but there will also be opportunities for umbrella workers to prosper in 2021.
In this article, we look at some of the most important challenges and opportunities facing umbrella workers this year.
Are you thinking about making the switch to work for yourself in 2022? You’re not alone. There are an estimated 4.3 million self-employed workers in the UK, but this is down from a peak of over five million at the start of 2020.
The pandemic has reduced self-employment, but numbers are starting to climb again.
Whether you are contracting through your own limited company or working through an umbrella company, working for yourself can be incredibly rewarding. It can help you do what you’re passionate about and gives you more freedom.
But there are downsides to self-employment too. Many self-employed workers work long hours, have irregular income and need to spend time on some boring stuff like admin and taxes.
If you’re thinking about going it alone this year, these 20 tips will help you find balance, manage financially and look after yourself.
Tax charities TaxAid and the Low Incomes Tax Reform Group (LITRG) have expressed concern about the number of ‘umbrella’ workers being pushed into tax avoidance schemes without their knowledge.
Speaking to the FT, the charities said that more and more workers were getting in touch to complain about non-compliant umbrella companies.
LITRG said some unscrupulous umbrella companies were failing to deduct tax on wages, effectively paying workers via ‘disguised renumeration’, which is banned by HMRC. Affected workers included agency nurses and supply teachers.
