Contractors Articles

marketing | 17 September 2019
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The controversial loan charge, which affects contractors who participated in ‘disguised remuneration’ schemes, could be scrapped after Chancellor Sajid Javid commissioned an official review into the tax.

The new review will conclude by mid-November to give taxpayers certainty ahead of the January Self Assessment deadline. It will be led by Amyas Morse, the former chief executive of the National Audit Office.

HMRC Accuses 1,500 GSK Contractors of IR35 Non-Compliance
marketing | 2 September 2019
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HMRC has sent a letter to around 1,500 GlaxoSmithKline contractors accusing them of being ‘disguised employees’ and ordering them to pay more tax under IR35 rules.

As the taxman ramps up the aggressive campaign against contractors, the letter was reportedly sent to contractors in different departments at the multinational pharmaceutical company.

HMRC’s letter says that in the 2018/19 tax year, their “view is that the contract between your PSC and GlaxoSmithKline (GSK) comes under the off-payroll working rules ‘IR35’.”

Finance Bill Confirms Private Sector IR35 Details
marketing | 15 July 2019
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The Treasury has published the Finance Bill 2019-20 , which confirms a number of important details about the upcoming IR35 reforms in the private sector.

 

Ignoring some of the recent calls for the reforms to be delayed, the bill confirms that off-payroll rules will be extended to the private sector from 6 April 2020.

 

In line with the changes in the public sector, private sector clients will be responsible for assessing a contractor’s IR35 status. Previously, this responsibility lay with the contractor.

 

HMRC Pressed For IR35 CEST Tool Release Date
marketing | 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.

 

Treasury Collects £1bn from Contractor Loan Charge
marketing | 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.

 

GSK Confusion is Just ‘Taste of Things to Come’
marketing | 4 September 2019
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A sense of panic and alarm spread rapidly through the wider contracting community when HMRC sent IR35 letters to more than a thousand GlaxoSmithKline (GSK) freelancers and contractors last week. But this is just a ‘taste of things to come’ when IR35 changes are extended to the private sector in April 2020, according to a contractor interest group.

HMRC’s ‘Crusade Against Contractors’ to Net £27.7m
marketing | 12 August 2019
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Investigations into the contractor employment status could generate close to £30m according to figures released by HMRC.

The data shows that HMRC believes it can generate an extra £27.7m before investigations are concluded. The figure refers to ‘tax under consideration,’ which is an estimate of what HMRC would lose if it didn’t investigate.

NHS Locum Contractor Wins Partial IR35 Tax Case
marketing | 11 July 2019
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An IR35 ruling on a case involving a urologist who worked for two different hospitals could have important consequences for medics operating as locums and NHS off-payroll working rules more generally.

In the tax tribunal case between a locum urologist and HMRC, a judge ruled that one of the contractor’s hospital contracts was inside IR35, while off-payroll working rules did not apply in the other.

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
marketing | 20 May 2019
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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.

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