Umbrella or PSC: What’s better for public sector contractors?

It’s a question that many limited company contractors will be asking in the coming months as impending changes threaten some of the biggest financial advantages that come along with limited company status.

For public sector contractors operating through personal service companies (PSCs) the changes could prove catastrophic.

The big shift concerns the IR35 status of public sector contractors – specifically, who judges a contractor’s IR35 status. From April, the responsibility for judging IR35 status will pass from the individual contractor to the hiring public sector body or agency charged with recruitment.

As a result, more contractors will be ‘caught out’ by the IR35 rules. Anyone ‘caught out’ by the changes will be reclassified by HMRC as being in ‘disguised employment.’ This means they will be taxed as if they were regular employees.

FreeAgent on the Go
Editor | 20 January 2017
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FreeAgent continues to update its mobile app to bring the functionality more in line with the browser edition.

December brought some new features to the Mobile App, many of which may be of use to our clients;

The ever-popular Tax Timeline has been included within the App with the option to turn on notifications. This can help you to make sure you don’t miss any important VAT or Corporation Tax payments. Umbrella Accountants will continue to confirm how much is due and when but it acts as a good aide memoire in today’s busy work environment.

Off-Payroll Working in the Public sector – New Legislation 6th April 2017
Editor | 18 January 2017
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As you may already be aware the Autumn Statement delivered a number of measures which effect the contracting sector including changes to IR35 and the VAT Flat Rate Scheme. The government has published a new policy document detailing the changes to IR35 and off-payroll working rules for public sector workers. View document here.

The Changes

PSC or “Limited Company” Contractors operating in the public sector will no longer get a say on whether or not the IR35 ‘intermediaries’ legislation’ applies to them. Consequently if they chose to continue being paid via their limited company, the contractor’s intermediary (Agency / Public sector body) will have to agree to deduct the appropriate TAX and National insurance as the ‘fee payer’.

What info does the taxman’s super computer have on you?
Editor | 13 January 2017
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Ahead of the January 31 deadline for 2015/16 tax returns, HM Revenue and Customs has released some details about its £100m ‘snooper computer’ that can tell if you aren’t paying enough tax.

The powerful super-computer known as ‘Connect’ draws information from lots of different sources, including some places you might not have thought about.

If the computer thinks that you have underpaid on your return then it will flag your account and prompt further investigation.

All this means that HMRC no longer needs to rely solely on information supplied by individual taxpayers. If you, accidently or otherwise, misreport your income then it could only be a matter of time before you get caught in the taxman’s web.

HMRC is already using the system to warn users that that they may have underpaid on previous tax returns.

Umbrella Accountants to attend FreeAgent Premium Partner Summit
Editor | 10 January 2017
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Representatives from Umbrella Accountants will be joining other accountancy professionals from across the country at the FreeAgent Premium Partner Summit in February.

We have attended the summit for the last two years and found it informative and a chance to provide feedback to the team at FreeAgent regarding future developments. It’s also a chance to meet other accountants in the same industry and exchange ideas and solutions which we have also found extremely useful.

If any clients have any suggestions for FreeAgent for future development or improvements then we encourage you to email accountancy@umbrella.co.uk and we will put them to the team while we are there.

Nick Holmes, Umbrella.co.uk CEO, presented Jen Hughes, Regional Fundraiser, and the Wish Bear a cheque at our Wilmslow head office.

"Thank you so much to all the staff at Umbrella.co.uk. The money you have raised will help to grant a magical wish for a very deserving child and will give their family memories to last a lifetime."  Jen Hughes

“Umbrella.co.uk are proud to continue to support When You Wish Upon a Star during 2017. We are looking forward to some fun fundraising activities including the Wilmslow Triathlon, dress down days and an office Lego Fire Walk. I’d like to take this opportunity to thank all the team at Umbrella.co.uk for their generosity and enthusiasm.” Nicholas Holmes, CEO.

Do I have to submit a tax return?
Editor | 20 January 2017
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With little more than a week to go before the self-assessment tax deadline hits, it is worth double-checking whether or not you have to submit a tax return.

If you have to send a tax return and you miss the 31st January deadline then you will be penalised. If your tax return is less than three months late then you’ll have to pay a fine of £100, but this figure can rise quickly if you submit a return after three months or you pay your tax late.

For certain groups like company directors, it is pretty obvious that you will have to pay. But there are some complicated rules that you might not have taken into account.

If you are an umbrella contractor with Umbrella.co.uk, then as a rule of thumb you won’t have to submit a tax return, but there are some circumstances that may contradict that. 

Allison Gallagher wins Umbrella.co.uk Employee of the Year 2016
Editor | 16 January 2017
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After the board of directors of the group had finished voting Allison emerged as the clear winner for the prestigious award. Her Job Title of Finance Manager does little to describe the amount of and variety of work that Allison manages to take on during any particular week.

Operations Director Neil Armitage said “She has been with the company for 7 years and knows the systems and the people inside out. There’s certainly not a single day goes past without most of us seeking out Allison’s advice on any number of matters from staff payroll to insurance through to HR. She is a very deserving recipient of the award and the board are pleased to be able to recognise her contribution to our success”

Ways contractors can combat rising VED and fuel prices in H1 2017

The dawn of the New Year took on a somewhat bum note for business drivers and other motorists thanks to a double whammy of cost increases to swallow, with a headline from the BBC1 reporting that ‘fuel prices hit 18-month high after OPEC production cuts’ and ITV News stating ‘drivers face most expensive petrol prices in two years’. The 24% jump in the price of oil seen from mid-November to the end of December contributed to petrol and diesel prices increasing by over 3p per litre during the festive month.

Editor | 6 January 2017
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The latest figures from a recruitment body might be discouraging for any contractors that made ‘getting a new job’ one of their New Year’s Resolutions.

The Association of Professional Staffing Companies (APSCo), whose latest figures cover November last year, found that the number of contract vacancies for jobseekers fell by five per cent compared with figures from the previous year.