For the last 10 years, the government have taken various steps to improve the effectiveness of the IR35 rules, with limited success. In April 2017 the government reformed the public sector rules which meant the responsibility to determine employment status changed from the contractor to the organisation whom they engaged with. This was put in place to increase compliance with the existing rules and not introduce a new tax liability.The government recognised that shifting responsibility is a … [Read more...]
Tax avoidance schemes aimed at contractors and agency workers
HMRC is aware of schemes that claim to increase your take-home pay by paying less Income Tax and National Insurance contributions. These schemes do not work and by using them you may be taking part in tax avoidance. How these schemes work Most umbrella arrangements operate within the tax rules, and correctly deduct tax and National Insurance contributions from all your earnings using PAYE.Some promoters of tax avoidance schemes set up umbrella companies and use them to convert income into … [Read more...]
Naming employers who fail to pay minimum wage to be resumed under revamped rules
Businesses that fail to pay their workers the National Minimum Wage or National Living Wage will continue to be publicly named by the government, following a review of the scheme. The naming scheme will resume calling out businesses failing to pay their workers the National Minimum Wage, while increasing support for employers to comply with NMW legislation. The changes, which will see naming rounds occur more often, will enhance the effectiveness of the … [Read more...]
Why recruitment agencies are outsourcing their payroll
It has never been a better time to be a freelance contract worker within the UK, growing numbers of agencies are becoming more and more reactive to the countries growing demand for a more flexible workforce. We have seen over a 40% growth in our business each year for the past 2 years, which is a clear sign of a change in which hirers are addressing their recruitment needs. With growth, comes further burdens to continue to grow unless processes are in place to support these … [Read more...]
HMRC announces change to the off-payroll working rules
Changes to the operation of the off-payroll working rules will only apply to payments made for services provided on or after 6 April 2020, HMRC has announced today ahead of the publication of the government’s review.The formal publication of a review into the implementation of changes to the off-payroll working rules is due to conclude in February.A common issue raised over the course of the review has been businesses’ concerns over what payments the rules apply to and from when. The … [Read more...]
Off- Payroll Reforms 2020
Major reforms to off-payroll (IR35) rules within the Private Sector are scheduled to take effect from April 2020.This will mean that the responsibility will be switched from many contractors to the end client. Their IR35 status of being inside or outside will have significant affects.The rules are not exactly straight forward but it is important to understand what they will mean to your agency as well as your end clients and contractors, so that you can make an informed decision about … [Read more...]
IR35 is coming regardless of Brexit or a General Election
Just because government are unable to sort out Brexit, this does not mean that IR35 scheduled in for April 2020 is going to be delayed. Regardless of Brexit, a General Election and possible leader change, IR35 will still be in place and actioned. There has been much mentioned recently that with a General Election and possible change in government IR35 will be shelved. This is not going to happen, according to a representative from Saffrey Champness, one of the UK's Top 20 accountancy … [Read more...]
IR35 and the Private Sector changes April 2020
This has and will be a very hot topic over the coming months with the April deadline fast approaching. The new “off-payroll” tax rules are coming in to effect across the private sector as of 6th April 2020. The revamp of the existing IR35 laws, which were introduced in 2000, ensuring that contractors not meeting HMRC’s definition of Self-Employed are not benefiting from tax breaks that are associated with contracting.Since the Public Sector changes back in 2017, the rules require companies … [Read more...]
Off-Payroll working in the Private sector – Draft Legislation
As I am sure you are all fully aware the draft legislation for Off-Payroll Working in the Private Sector has been released. This is very much in line with what we were expecting and have been advising on.Whilst it is open for comments before being added to The Finance Bill 2019, we do not anticipate any significant changes.There are some key points of note in this updated legislation when compared to the Public Sector version:It is happening in April 2020. Clients have an … [Read more...]
EU Settlement Scheme – One Million People Granted Status
This week the millionth person was granted status under the EU Settlement Scheme – just five months after the Scheme fully opened.The Home Office is committed to making the process of applying to the EU Settlement Scheme as simple and straightforward as possible and looks for reasons to grant status, not refuse it.This milestone has been announced alongside the latest application statistics for July, published today (15 August). This demonstrates the progress of the Scheme to date and we … [Read more...]