Following changes for off payroll working in the Public Sector, many contractors may have found themselves assessed as working inside IR35. Many end clients do not want the hassle of deciding each individual case and so have placed a blanket ban on all contractors. Many of these contractors cease operating through their own limited company, and opt instead for umbrella employment as their agency and end client have suggested. For a contractor working inside IR35 this is usually the better … [Read more...]
U-turn on Class 4 NICs
The Chancellor, Richard Hammond, has announced a U-turn on the proposed rise in national Insurance rates for the self-employed. In the Spring Budget it was announced that as of 6th April 2018, Class 4 NICs would be increasing to 10% from the current 9% in place, with a further increase to 11% the following year. In a letter to Tory MPs, the Chancellor revealed that he has “decided not to proceed” with the planned rise in NICs for self-employed workers, despite only announcing the measure … [Read more...]
IR35 Reform of Intermediaries Legislation: Public Authorities
HMRC has published an update on it's Off-payroll working in the public sector: reform of intermediaries legislation page to include further information for public authorities. Gov.co.uk states under Public Authorities: "For the purpose of this reform, a public authority means a public authority as defined for the purposes of the Freedom of Information Act 2000 and the Freedom of Information (Scotland) Act 2002. This definition covers government departments and their executive agencies, many … [Read more...]
Booming gig economy is bad for UK public finances, says TUC
Low-paid self-employment and zero-hours contracts are costing more than £75m a week in lost taxes and national insurance contributions, new research indicates. The rapid rise in insecure work in the UK is costing the government almost £4bn a year in lost tax income and benefit payouts, according to new research into the gig economy by the Trades Union Congress. The UK’s growing legions of low-paid, self-employed workers and those on zero-hours contracts earn significantly less than regular … [Read more...]
IR35 inspectors to probe public PSCs retrospectively
Personal service companies deemed inside the public sector’s April 6th off-payroll rules risk having their entire history of contracts probed under IR35, not just those after the date. Most at risk of being investigated under IR35 retrospectively are the ‘pre-April 6th’ contracts the PSC has with the public client, who deems the rules to apply to the PSC ‘post-April 6th.’ This was the assessment yesterday from three separate experts on the incoming rules; status advisory Bauer & … [Read more...]
Do you operate within the Public Sector?
Last Monday saw the release of the HMRC’s draft finance bill, detailing the reforms as to how the IR35 legislation must be operated in the public sector from April 2017. There have been strong reactions from industry bodies to the Government’s new ‘Draft provisions for Finance Bill 2017’, nearly 400 pages of new tax legislation setting out the draft provisions for technical consultation, including changes to National Insurance contributions, clampdown on salary sacrifice contracts for new car … [Read more...]
HMRC, are the gloves off? Is there a storm brewing?
Offshore scheme users face requirement to notify HMRC. Contractors can have their say on their incoming requirement to notify the taxman if they use an offshore structure with evasion “characteristics” which its creator failed to declare. Under proposals published last week, the parties behind such “complex offshore arrangements” structures must inform them to HMRC and provide a list of clients using it. But if the creator (or promoter) fails to declare the arrangements -- which the … [Read more...]
Autumn Statement: Hammond heaps on more anti-contractor measures
Philip Hammond seemed to wrong-foot the entire contracting industry in his first Autumn Statement (AS) today, November 23rd 2016, by not stating “IR35” once, neither in his speech, nor in his full report. But at AS 4.11, entitled ‘off-payroll working rules,’ the Treasury confirms that it will shift the responsibility and liability for IR35 in the public sector from PSCs to the ‘paying agents’, from April. It means that an adviser to contractors was right to tell ContractorUK on the eve of … [Read more...]
The door is firmly shut
ContractorUK has recently written that “Temporary staff agencies have avoided hundreds of millions (if not billions) in tax”………….. HOW? By a scheme that far too many agencies are allowing contractors and temporary workers to register with – THIS HAS TO STOP. In simplistic terms, the scheme pairs up all the workers, and routes them through a myriad of smaller Limited Companies. Clearly, these are NOT TRUE Limited companies. These mini employment companies are ultimately exploiting both VAT … [Read more...]
HMRC launches new employment status unit
Recruiters have been urged to review their practices to ensure individuals are not being misclassified as self-employed. The warning comes from employment lawyers after it emerged HM Revenues & Customs is launching a specialist unit to investigate firms suspected of withholding employment protection from workers, by using agency staff or calling them self-employed. The move was confirmed last week in a letter from financial secretary to the Treasury, Jane Ellison, to Labour MP Frank … [Read more...]