hmrc Articles

‘Too good to be true’ payment scheme users risk bankruptcy
marketing | 30 October 2017
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A recently concluded court case could have far-reaching consequences for contractors on ‘too good to be true’ tax avoidance schemes.

In a warning sign to contractors that are thinking about using a dodgy ‘too good to be true’ remuneration scheme, MPs have been told that users of one type of tax avoidance scheme could risk bankruptcy in the near future.

The charge centres on a recently concluded Supreme Court Case between Rangers Football Club and HMRC and a tax avoidance scheme where an offshore Employee Benefit Trust (EBT) paid players and other staff through loans. 

The new Tax Evasion Legislation for Recruitment Agencies
To prevent tax evasion, the new tax law makes recruiters criminally responsible.
 
Following on from recent tax scandals, including the Panama Papers and various loan write-off schemes, a new corporate “failure to prevent” offence is being introduced from 30th September with a severe penalty regime that should make all agencies sit up and take note.
 
With unlimited fines and the possibility of a criminal record a clear target is being painted on the backs of any part of the staffing supply chain that isn’t compliant. Of vital importance is the fact that an agency can be convicted even if no intent is established and the agency has not benefited financially from the arrangement.
 
 
 
 

 

Updated IR35 rules for public sector contractors
marketing | 17 July 2017
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HM Revenue and Customs (HMRC) has released more information about the rules governing off-payroll contractors in the public sector.

HMRC updated its guidance on the rules, which have been in effect since April.

The updated guidance clarifies some sticking points that have confused contractors for months.

Since 6 April 2017, responsibility for determining IR35 status has passed from public sector contractors, operating through an intermediary, to the public sector body engaging the contractor.

Although the fundamental rules are the same, the April change is seismic in terms of how the rules are applied. 

Tool: Check your IR35 status before April
marketing | 7 March 2017
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HMRC has launched a new tool designed to help contractors, and those that engage them, decide a worker’s IR35 status.

But with less than a month to go before a fundamental change in the way IR35 rules are applied, some experts have found cause for concern with the Employment Status Indicator tool.

A contractor’s IR35 status is all about whether the contract they are working on should be considered employed or self-employed for tax purposes. The Employment Status Service is supposed to give HMRC’s view of whether a contract is inside or outside IR35.

This will be of particular interest to limited company contractors working in the public sector because, from April, it will be the public sector organisations that decide on IR35 status instead of the individual. 

It is always scary pushing the submit button on your self-assessment. Even for veteran contractors, sending the final document can be unnerving because traditionally, HMRC doesn’t have much sympathy for mistakes.

Some public sector contractors missing out on 30% of income after IR35 changes

Some self-employed contractors lost 30% of their income in the wake of IR35 reforms that took effect in the public sector this in April.

As the dust settles around the changes IT recruitment company, CW Jobs, found that more than 70% of their clients saw a reduction in income after the IR35 reforms.

Of these contractors, a quarter saw a reduction close to 30%.

The IR35 reforms mean that contractors who work solely or primarily for public sector bodies are being taxed as if they were regular employees of that company. But are no receiving any of the accompanying benefits such as such pay or holiday entitlement. 

July 31st Summer tax deadline looms for self-employed

July 31st is little more than a week away, if you are self-employed then you may have to make a tax payment before this date, or risk a late payment fine.

In many ways it is the lesser known tax deadline. While January 31 looms large in the minds of all self-employed workers as the time when you need to get all your tax affairs in order and pay what you owe, the July deadline can be forgotten all too easily.

But remembering it is crucial if you want to avoid a fine and interest accruing on your HMRC debt.

The July 31 deadline is not the same as the January 31 deadline. You don’t have to submit another self-assessment; you just need to make a payment. 

HMRC harpoons new ‘loyalty points’ umbrella scheme as a disguised renumeration tax avoidance scheme

HM Revenue and Customs has warned taxpayers that it is aware of a new ‘tax avoidance’ umbrella scheme in which contractors are paid, in part, with loyalty points that can be redeemed for ‘tax free’ income.

The tax authority has said that they consider the umbrella scheme to be against the rules of disguised remuneration and that users of the scheme will have their tax affairs investigated. 

FCSA blasts public sector IR35 changes
marketing | 10 February 2017
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A professional contractor employment services body has been scathing in its criticism of the changes to the off-payroll public sector changes, due to take effect in less than two months.

The Freelancer & Contractor Services Association (FCSA), which represents more than 110,000 contractors in the flexible workforce sector, said that the changes raise problems associated with accountancy, points of law and practicality. 

Do I have to submit a tax return?
marketing | 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. 

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