Budget 2018: How It Affects Contractors
Editor | 30 October 2018
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Delivered by Chancellor Philip Hammond on Monday, the 2018 Budget was another important one for contractors.

In this blog post, we look at some of the most important announcements and how they will affect contractor pockets.

CEST Questions as Judge Rejects IR35 Ruling
Editor | 25 October 2018
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More questions have been raised about the reliability of HMRC’s Check Employment Status for Tax (CEST) tool, after a judge rejected one of the tool’s assessments.

A contractor managed to reclaim thousands of pounds in overpaid tax after the CEST tool’s ‘inside IR35’ ruling was challenged in an employment tribunal.

At first, the contractor known as Mr Elbourn went to the tribunal to try and claim back employer’s National Insurance contributions, which he thought had wrongfully been deducted by an employment agency.

Chancellor takes aim at private sector contractors
Editor | 15 October 2018
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Media reports suggest that the Treasury is planning to overhaul IR35 tax rules with a costly policy for limited company contractors.

The move, which could be announced in this month’s Budget, would see public sector IR35 compliance rules extended to the private sector.

Just like public sector bodies, private firms would be responsible for ensuring that off-payroll personal service company contractors stick to the IR35 rules.

If a firm deems a contractor to be ‘inside-IR35’, the contractor would need to be placed onto the company’s payroll and would be liable to pay higher national insurance contributions.

Missed the First Loan Charge Settlement Deadline? Don’t Despair
Editor | 3 October 2018
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HMRC is targeting contractors that have participated in disguised remuneration ‘loan schemes,’ and time is running out to avoid an enormous tax bill next year. 

If affected contractors fail to make a settlement with HMRC by 5 April 2019, any outstanding ‘loan’ tax payments could be tacked onto their 2018/19 tax bill.

Unfortunately, the first settlement deadline has already passed. HMRC had instructed contractors to register their interest in settling and fill out relevant documentation before 30 September.

Contractors’ 2019 Loan Charge Settlement Deadline Approaches

Contractors who have participated in a disguised remuneration loan scheme have until 30 September 2018 to send settlement information to HMRC, or they risk paying an enormous bill in the 2018/19 tax year.

Disguised remuneration schemes are tax avoidance schemes in which participants receive income in the form of a ‘tax-free loan’, rather than traditional income.

HMRC counts this type of loan as income and says that tax is due on it. In 2017, the government introduced the ‘2019 loan charge’ to retrospectively collect tax money from disguised remuneration scheme losers.

Private Sector IR35 Reforms: What It Means for You
Editor | 30 October 2018
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The Treasury released new guidance on off-payroll working (IR35) in the private sector yesterday, following the Chancellor’s Budget speech.

Following a consultation on the rules, some commentators expected IR35 reforms to take effect from next year. But the policy paper reveals that the changes will be introduced in April 2020, giving businesses more time to prepare for the reforms

We’ve combed through the policy document, picking out the key points so you can understand how the changes will affect you.

IR35, Presenter, Eamonn Holmes, HMRC
Editor | 25 October 2018
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ITV host Eamonn Holmes is locked in an IR35 legal battle with HMRC.

The ‘This Morning’ presenter told the Mail on Sunday that he is the subject of a HMRC ‘test case’ which could result in him paying £2m in unpaid taxes if he is found to be in breach of IR35 rules.

Making Tax Digital deadline: Time is running out for contractors
Editor | 4 October 2018
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Contractors are running out of time to comply with HMRC’s new Making Tax Digital (MTD) initiative, which requires them to keep digital accounting records and use approved software to submit tax information to HMRC.

The first MTD deadline, for limited company contractors that earn over the £85,000 VAT threshold, is just a little over six months away.

From April 2019, these contractors will no longer be able to submit their VAT return manually with HMRC’s ‘direct tools’. Instead they will have to use HMRC-compliant software like FreeAgent or Xero to keep digital records and automatically submit their VAT returns. 

 

Freelancers Feeling Inflation More Than Most
Editor | 20 September 2018
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Freelancers are feeling the latest inflation rise more than employees, according to the Association for Independent Professionals and the Self-Employed (IPSE).

The warning for freelancers came after the Office for National Statistics revealed that inflation rose by a higher than expected 2.7% in August.

Measured by the Consumer Prices Index (CPI), this was the highest monthly price increase in six months.

Jordan Marshall, IPSE’s Policy Development Manager said: “Freelancers will be especially hard hit by this jump in inflation not only because, unlike employees, they pick up their own business costs, but also because they travel more to win and work on different contracts. They will particularly feel the effect of the 13.5 per cent jump in air fares, because many of them take up contracts overseas and travel long distances in the UK.

Another Dividend Tax Grab This Autumn?

Chancellor Philip Hammond has been urged not to ‘clobber’ limited company contractors and other businesses with another dividend tax grab this autumn.

The Federation of Small Businesses (FSB) said it was concerned that the Treasury might once again cut the tax-free dividend allowance for limited company directors, to collect an extra £1.3bn in tax receipts. 

The Chancellor has already reduced the allowance from £5,000 to £2,000, a policy which took effect this April.

Now there is concern that Philip Hammond will announce a fresh raid on the dividend tax-free allowance in this year’s Autumn Statement.

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