Banking and IT Contractors are reeling after the Morgan Stanley decision to take no more contractors. This is a direct result of Philip Hammond’s and Theresa May’s decision to roll out the public sector IR35 changes in the private sector from April 2020. This will come into effect in October 2019.Existing contractors have been offered three options:Leave Morgan Stanley Immediately Accept a contract that is inside IR35 After 22 months of option 2 they must become permanent … [Read more...]
Disguised Remuneration = ‘Loan Charge’
We have been going on about this for a while, knowing it would only be a matter of time before HMRC would clamp down on these non-compliant payroll schemes. We all know if something is too good to be true, it usually is.Disguised remuneration schemes are arrangements that pay loans instead of normal salary to avoid Income Tax and National Insurance contributions.From April 2019, HMRC will introduce the loan charge to deal with the use of these avoidance schemes.The terms were … [Read more...]
Risks Facing The Recruitment Sector in 2019
Whilst the recruitment industry is a good barometer for the economy in general and is affected by Brexit and GPDPR, like all other sectors, recruiters will face some very specific risks in the coming year. IR35 was a major concern throughout 2018 and we now know that the changes will be introduced to the private sector in April 2020. We have already seen recruiters looking at workarounds, as pressure from hirers intensifies throughout 2019.With possible changes to regulations in the payroll … [Read more...]
Preferred Supplier Lists
As we settle into 2019 it is time to reflect and review on how we are doing, to avoid regulatory penalties and improve our business for the coming year.Many recruitment agencies use preferred supplier lists (PSL) for umbrella companies, but how do you ensure this is followed by your workforce? There has been mention of HMRC targeting individual consultants for unpaid tax, due to direct payments made by providers.Referral incentives place consultants at risk and can leave businesses open … [Read more...]
New HMRC Spotlight on umbrella companies ‘does not go far enough’
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...]
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...]