The new CEO of the Freelancer and Contractor Services Association (FCSA) hinted that his organisation could start ‘naming and shaming’ non-compliant umbrella companies in a bid to boost standards.
disguised employment Articles
HMRC won its first IR35 ruling in seven years, as former BBC presenter Christa Ackroyd lost an appeal covering tax years between 2006/07 and 2012/2013.
In Christa Ackroyd Media (CAM) Ltd vs. Revenue & Customs, HMRC successfully argued that the ‘Look North’ presenter owed more than £400,000 in income tax and National Insurance Contributions.
The win is significant for HMRC because it is the first in a string of IR35 appeals against BBC personalities.
The BBC has reported that 148 of it's on screen presenters, actors or artists have been paid through their own personal service companies (limited companies) rather than as employees.
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.
Reforms to ‘disguised employment’ IR35 rules were introduced in the public sector this year. The new rules caused confusion amongst recruiters and lead to a take-home pay cut for many contractors.
Now the Treasury has dropped its strongest hint yet that similar reforms could be introduced in the private sector – with the potential to affect millions of contractors and freelancers.