Umbrella companies inspiring HMRC’s new ‘Spotlight’ publication – dedicated to schemes that avoid tax – has been endorsed by payroll company bosses themselves, albeit tentatively.In fact, far from disliking brollies being in a HMRC series on abusive arrangements, Contractor Umbrella says it is “useful,” CWC Solutions deems it overdue and the FCSA said it was "welcome.”HMRC putting beyond doubt that 80, 90 or 95% take-home pay is not tax-compliant; that brollies are “never HMRC-approved”, … [Read more...]
New IR35 rule ‘raises client risk to corporate evasion offence’
The private sector IR35 reform proposal threatens to expose clients to the new corporate criminal evasion offence if they fail to ensure PSCs pay the "right amount" of tax, a law firm is warning.Assuming the much-disliked IR35 reform plan is adopted, the September 2017 offence could catch engagers if the contractor is found evading tax, as opposed to avoiding it, cautioned Pinsent Masons.So rather than just simply applying a liberal interpretation of IR35 case law, the contractor could … [Read more...]
If it sounds too good to be true, it usually is
Public sector nurses and social workers who have been encouraged by recruitment agencies to take their wages through suspected tax avoidance schemes are now in debt of tens of thousands of pounds following HMRC investigations.Employment agencies have been taking business from rivals by allowing workers to be paid through umbrella companies offering between an 80-90% take home pay.These tax schemes, which are usually registered in places like the Isle of Man or Malta, attract workers due … [Read more...]
Don’t settle for expecting the unexpected
With hundreds of provider’s advertising their wares within the Umbrella Payroll market space it is difficult for a contractor to compare all of the different figures that they are provided. Finding the right Umbrella Company is important as these will be the companies that ensure that a contractor is paid accurately and on time. Since the implementation of the IR35 changes in April 2017, the main grievance from contractors who have had to utilise an Umbrella Company’s services, has been that not … [Read more...]
Just when I thought I was OUT, they pull me back in
With ongoing research by many commentators showing that contractor’s confidence in HMRC’s IR35 CEST (Check Employment Status Test) tool is low, questions are now turning to whether the tool is now even fit for purpose. This is especially prevalent with the governments supposed determination to implement these changes to the private sector.The CEST tool is used by contractors’ and Public Sector Authorities to accurately assess and determine an engagement’s IR35 status. Provided the … [Read more...]
To Prefer or not To Prefer…. That is the question
Whilst many Recruitment Agencies utilise a Preferred Supplier List (PSL) of umbrella companies and contractor accountants, how sure can stakeholders of an agency be that this is being enforced by their workforce?Unfortunately, not everyone plays fair and with the introduction of various pieces of legislation in the past few years, the need for an agency and its directors to protect itself has never been greater. The new Criminal Finance Act especially includes the corporate offence which … [Read more...]
Your Provider May Giveth but HMRC May Taketh Away!
Only last week we heard that several recruitment consultants had received tax demands from HMRC relating to unpaid tax on incentive payments received from one or more umbrella companies. If recruitment agency staff accept monies, vouchers and other types of benefit from umbrella providers, they should be declaring this as taxable income.The Government is taking this issue seriously and the actions being taken within the next two years will highlight not just taxation but also the UK’s … [Read more...]
IR35 Forum suggests it’s time to prepare for private sector reform
Signs still point towards an announcement in this year's Autumn Budget, with the new rules perhaps coming into force in April 2019The much-debated future of IR35 in the private sector reached new levels of uncertainty recently, with the minutes from the government's IR35 Forum yet again hinting that reform is on the cards.The IR35 Forum is a group of external stakeholders, including taxpayer representatives and professional advisers, who meet quarterly with HMRC. It was established … [Read more...]
IR35 reform coming sooner not later, says HMRC
Private sector IR35 reform will happen way before long-term changes to employment status on the back of Matthew Taylor’s already-published review get made, the taxman suggests.In new IR35 Forum minutes, HMRC says the Taylor response consultation – due this year -- will consider the long term case for reform, but it adds “there is a more immediate need”.Namely; “to consider how best to tackle private sector non-compliance with the off-payroll working rules,” which -- the Revenue … [Read more...]
Nurses & agencies using umbrella loan schemes risk tax bills and prosecution
ePayMe have been advising agencies and contractors about the pitfalls of sourcing schemes that offer a higher net take home pay that normal. Please don't fall into the trap of thinking that it's fine, you won't get caught or it's not your problem. It's not just the healthcare sector that are in the spotlight - any sector, contractor or agency need to be aware.ePayMe Founder and Chairman, Andrew Johnston said 'Over the past 3 years, I have seen a myriad of 'solutions' offered and quite … [Read more...]