One-in-three contractors working outside IR35 rules

Following the introduction of new off-payroll working (IR35) rules in April, research suggests that around one-third of limited company contractors are currently working on ‘outside IR35’ contracts.

Separate studies from Qdos and inniAccountants concluded that around one-in-three (33% and 36% respectively) contractors have been able to retain or secure a new commercial contract.

According to the inniAccounts survey, which took place in March and April, 35% of contractors said that that they were either classed as ‘inside IR35’ or blocked from working through a personal service company (PSC).

Calls to regulate ‘cartel’ umbrella companies

Industry experts have called on the government to regulate the ‘cartel-like’ umbrella market.

Former senior policy advisor to the Treasury, Rebecca Seeley Harris, and offpayroll.org founder James Poyser argue that urgent action is needed to stop scandalous companies ripping off workers and bringing the sector into disrepute. 

How to Avoid Tax Dodging Mini Umbrella Companies

Most umbrella companies that you’ll see online are legitimate businesses that pay the correct amount of tax and comply with relevant employment legislation.

Unfortunately, the sector is brought into disrepute by a small group of illegitimate companies that seek to defraud contractors and the state. It seems the latest attempt at doing this is with so-called ‘mini umbrella companies’.

A recent BBC investigation found that around 48,000 mini umbrella companies have been created in the UK in the last five years.

CIS Workers: Get Your Refund Back Fast With Umbrella.co.uk
Editor | 27 April 2021
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If you’re a sub-contractor working within the Construction Industry Scheme (CIS), you can get your annual tax refund back faster with Umbrella.co.uk. The average CIS rebate is around £2,000, but you can claim back even more with our tax experts.

Whatever you’ve got planned this summer - whether it’s a much-needed holiday, home or garden improvements or a real treat for your friends or family - make sure you’ve got the cash when you need it.

Limited Company Contracting in 2021/22? Time for a Rethink

Are you a contractor? Are you planning to work through your own limited company in the new tax year? New IR35 rules could mean that it’s time to rethink the ltd way of working.

Changes to off-payroll working (IR35) rules mean that contractors are more likely to be caught out. From the start of the 2021/22 tax year, private sector clients will be responsible for judging a contractor’s IR35 status for the first time.

Set up new hotline to report dodgy umbrella companies, HMRC told

The REC, which represents professional recruiters in the UK, has called on HMRC to set up a hotline to allow workers to report bad practices by umbrella companies.

After recent reports of unscrupulous behaviour by some umbrella companies, the recruitment body joined several politicians in calling for tough new action to protect workers.

Reporting a non-compliant umbrella company

Most umbrella companies meet all tax and labour laws and have nothing but good intentions when it comes to looking after their employees.

Unfortunately, whether it’s through inability or corruption, some umbrellas don’t meet the standards that employees expect of them.

If you suspect that an umbrella company is acting illegally or unethically, you should report them. We explain why and how you can do this below.

Benefits of contracting vs permanent employment

Are you looking for a change? Each year, thousands of Brits start contracting to get them out of a slump in their work or home life.

For many full-time employees, contracting is the answer to numerous issues with their work and lifestyle. It lets people use skills and experiences developed as an employee and apply them on their own terms - at a time and place to suit.

To be sure, contracting isn’t for everyone. There’s definitely some downsides that come from trying to make it under your own steam, but we think the benefits outweigh the downsides, especially when you use an umbrella company like Umbrella.co.uk

The Super Deduction Explained
Editor | 13 April 2021

What is a super deduction?

It allows companies to claim a 130% first year allowance (FYA) for investment incurred on qualifying plant and machinery acquired between 1 April 2021 and 31 March 2023.

Under the super deduction, for every pound a company invests, their taxes are cut by up to 25p.

The government announced the super deduction in the March 2021 Budget, in the hope that the scheme will encourage business investment and stimulate economic growth.

How to choose a compliant umbrella company

Stricter IR35 rules mean that many limited company contractors are looking to switch to an umbrella working model.

Joining an umbrella company means that you pay tax at the same level as an ‘inside IR35’ limited company contractor, while also benefiting from holiday and sick pay entitlement.

When you choose an umbrella company, it’s imperative that you choose a compliant provider. Not doing your research at an early stage could cost you in the long run.

Umbrella compliance has hit headlines recently after HMRC warned contractors about a number of schemes offering higher than average rates of take home pay.

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