HMRC Pressed For IR35 CEST Tool Release Date
Editor | 3 July 2019
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HMRC is under pressure to say when the new improved IR35 ‘Check Employment Status for Tax’ (CEST) tool will be released, as stakeholders point out flaws with the current version.

 

The tax authority has confirmed that its CEST tool will undergo enhancements before IR35 reforms are extended to the private sector from April 2020.

 

But so far, little is known about what updates will be applied and when the new tool will be available.

 

Private Sector IR35 Consultation Responses Criticise Proposals

Respondents to HMRC’s consultation on proposed changes to IR35 rules in the private sector have highlighted a number of concerns about the plans.

Analysing consultation responses from a broad range of interest groups, ContractorCalculator found a number of recurring themes in the criticism. See article: https://www.contractorcalculator.co.uk/ir35_summary_responses_off_payroll_private_sector_551010_news.aspx

HMRC launched a consultation into off-payroll working rules in the private sector earlier this year. The planned reforms would affect limited company contractors working in the private sector from April 2020. 

One-in-Five Sole Traders Needlessly Preparing for IR35 Reforms

New research indicates that one-in-five UK sole traders are preparing for the upcoming changes to off-payroll working rules in the private sector, despite the fact that the legislation will not affect them.

Completed by the Freelancer & Contractor Services Association (FCSA) professional body and cloud accounting software provider FreeAgent, the research found that 18% of sole traders were making preparations for the new rules when they would not affect their business type.

Treasury Collects £1bn from Contractor Loan Charge
Editor | 23 May 2019
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The Financial Secretary to the Treasury this week confirmed that HMRC has collected £1bn from the loan charge, with most of the money coming from contractor employers.

Answering questions in parliament, Mel Stride said that 85% of the £1bn so far collected came from employers. He added that the average salary of the employees impacted was double the national average.

Taking effect this tax year, the loan charge is levied on contractors involved with one type of disguised remuneration scheme.

 

Balfour, Vodafone and Others Suspended from Prompt Payment Code

An organisation acting on behalf of the government has cracked down on late paying large businesses this week, suspending 12 firms from a voluntary punctual payment code.

The list of firms includes several construction giants Balfour Beatty, Laing O’Rourke, Interserve, Costain and Persimmon.

Limited Company Contractors Can Benefit From Open Banking

Open Banking is set to modernise bookkeeping for limited company contractors, with banking data integrated directly into online accounting software.

Umbrella.co.uk's limited company contractors all use FreeAgent’s cloud accountancy software to simplify their accounting. And with FreeAgent on the forefront of the Open Banking changes, bookkeeping is about to get even easier.

Open Banking is set to roll out to all FreeAgent customers soon, so we thought we would take an in-depth look at the changes and how they can benefit limited company contractors.

European Court Rules That Employers Must Track Worker Hours

In a new ruling that could affect agencies and other employers, The Court of Justice of the European Union (CJEU) has confirmed that employers need to have systems in place to accurately record hours worked by a worker each day.

In a case between the Federación de Servicios de Comisiones Obreras (CCOO) and Deutsche Bank SAE, the court ruled that employers need to have records of hours worked to ensure compliance with the Working Time Directive.

Contractors Stung by Dividend Allowance Cut

After wrapping up their tax affairs for the 2018/19 tax year, many limited company contractors will only now be waking up to the reality of the 2018 dividend allowance cut, which saw the tax-free dividend allowance drop from £5,000 to £2,000.

In 2018/19, this tax-free allowance was applied to the first £2,000 of dividend income. Above £2,000, dividends are taxed at a flat rate according to the tax band they fall into.

Majority of Public Sector Contractors Ruled Inside IR35

Ahead of reforms to private sector IR35 rules, new research shows that several public sector organisations are, in the majority of cases, judging contractors to be inside IR35.

Since 2017, public bodies have been responsible for deciding whether a contractor is truly self-employed or whether they should be taxed as if they were an employee of the firm.

The rules apply to limited company contractors who, before the rule change, were responsible for judging their own IR35 status.

From April 2020, the same reforms will be introduced in the private sector, so that organisations with 50 or more employees will be responsible for judging a contractor’s IR35 status.

HMRC Wins Case Over Contractor Loan Scheme

HMRC has won a tribunal case against a contractor loan scheme promoted by Hyrax Resourcing Ltd.

Hyrax Resourcing will now be forced to disclose the details of 1,180 ‘high earners’ that use the scheme and help the tax authority claim back more than £40 million in unpaid taxes.

The scheme in question was a disguised remuneration tax avoidance scheme that paid users in loans so that they could avoid paying income tax and National Insurance contributions on their earnings.

 

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