How Summer Mini Budget Will Affect Contractors
Editor | 9 July 2020
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The Chancellor’s £30bn plan to protect jobs and boost the economy in the wake of the coronavirus outbreak doesn’t include everything on contractor’s wishlist, but some of the measures will be welcome.

The ‘mini budget’ includes plans to reward employers that bring back furloughed workers, increase the threshold on stamp duty and cut VAT in some key at-risk sectors.

End of Furlough Looms for Contractors

Many industries have been rocked by the ongoing coronavirus pandemic. As the smallest entity in supply chains, contractors will be among the hardest hit by the virus lockdown.

For many contractors, the Coronavirus Job Retention Scheme (CJRS) has been a valuable source of support when other work has dried up.

Because umbrella companies employ umbrella contractors on a PAYE system, contractors have had the opportunity to receive furlough payments since the scheme was announced.

IR35 Rule Change Set for 2021

Controversial changes to off-payroll working (IR35) rules are set to come into force in April 2021, after MPs ignored a call to delay the changes until 2023.

Changes to the way IR35 rules are applied in the private sector were originally penned to take effect in April 2020, before pandemic-related uncertainty forced a stay of execution from lawmakers.

comparing umbrella companies

New HMRC research has revealed that some of the most attractive ‘umbrella’ deals on comparison and broker websites aren’t tax-compliant, meaning they could land you with a big bill further down the line.

The companies that come out on top of these comparison listings usually boast unbelievable take home pay figures, together with other ‘too good to be true’ advantages. In reality, the only way umbrella companies can achieve these ‘enhanced’ or ‘advanced’ rates is through tax avoidance.

Remember, YOU are responsible for paying the right amount of tax. The tax man will come after YOU if you try and cheat the system. And if a deal sounds too good to be true, YOU know that it probably is.

At Umbrella.co.uk, we’re proud of our track record of protecting clients through compliance. We’re accredited by the FCSA and APSCo, two of the largest and most prestigious staffing and employment bodies. We have also been approved as business partners by the Recruitment and Employment Confederation (REC).

Government guidance issued on 4 April confirms that Company Directors are eligible to be furloughed and receive support through the Coronavirus Job Retention Scheme (CJRS).

Government guidance issued on 4 April confirms that Company Directors are eligible to be furloughed and receive support through the Coronavirus Job Retention Scheme (CJRS). This is welcome news as Directors could get paid 80% of wages, up to a monthly cap of £2,500.
 
If the furlough option is followed, the Director may not work for a minimum 3 week period and may only carry out statutory duties set out in the Companies Act 2006. The decision to furlough should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the Director(s) concerned.
 
If you require further information regarding furlough, please email  furlough@umbrella.co.uk or follow the following useful links:

Keep well and stay safe. We will continue to update you with any relevant information.

How do umbrella companies avoid IR35?

Umbrella companies allow contractors to achieve IR35 compliance. If a limited company contract is deemed ‘inside IR35’, contracting through an umbrella company is usually preferable.

This will become more important as an upcoming rule change will mean that many more contractors are caught out by IR35 legislation.

Construction: Reverse VAT charge delayed until 2021

A major change to the way that VAT is paid on building and construction invoices has been delayed again, this time until 1 March 2021.

At the end of May, HMRC said that the domestic reverse charge rules for the construction industry would commence on 1 October 2020. However, a week later, the tax authority confirmed that this would be pushed back by five months, due to the impact of the coronavirus pandemic on the sector.

Umbrella contractor customers have free access to a professional counselling service with Umbrella Rewards

It’s Mental Health Awareness Week in the UK. We’d like to take the opportunity to remind our contractor customers that you have access to a free professional counselling service with Umbrella Rewards. If you are affected by mental or emotional strain, especially in these difficult times, login to the Umbrella Rewards Customer Portal and visit the 'Care & Support' area. 

Government must address IR35 flaws, say Lords
Editor | 30 April 2020
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A House of Lord committee has concluded that the government needs to address a raft of unfair flaws in the IR35 system, before new rules are implemented in the private sector.

Lords on the Economic Affairs Finance Bill Sub-Committee found that IR35, which is supposed to tackle tax avoidance by people in ‘disguised employment’, has not worked properly since it was introduced 20 years ago.

The Job Retention Scheme - Update for Umbrella Contractor Employees

We hope you are staying safe in these testing times.
 
The Job Retention Scheme has been announced by the government to support those PAYE workers who have been laid off due to the coronavirus.
 
Unfortunately as a business we are restricted by the pace in which the government releases the detail. The Directors here at  umbrella.co.uk are in talks with our employment lawyers continuously about the Job Retention Scheme as well as liaising with industry bodies like the FCSA & APSCo.  See the latest response from the FCSA here.
 
Rest assured we are hoping to be in a position where those whose assignments are terminated due to Covid 19 are able to be furloughed. However, until we are comfortable with the detail we cannot provide you with confirmation.
 
Once we have the full detail from the government in terms of how furlough payments can be processed for umbrella employees, we will be back in touch with the information you need.

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