Following concerns that umbrella companies might be affected by some ambiguity in the legislation emerging out of off-payroll reforms. HMRC and FCSA held a productive meeting yesterday to confirm that the new legislation was not designed to capture the relationship between umbrella companies and recruitment agencies.
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.
We are awaiting further information from government in relation to the Government’s planned job retention scheme / furloughing workers receiving 80% income.
We are hoping that the job retention scheme will be applicable to umbrella, but we do not actually know for certain at this stage.
The situation is changing on a daily basis and we will keep you informed of all developments that we are aware of.
Please find some useful information about Recruiters and the Coronavirus Job Retention Scheme here.
Nick Holmes, CEO.
Eamonn Holmes has become the latest TV star to lose an expensive IR35 tax case with HMRC.
The veteran This Morning presenter enjoyed certain tax advantages because he was working as a contractor through a limited company.
However, after the taxman challenged his employment status in court, a judge ruled that the Holmes was effectively employed by ITV.
The Government has this week launched a review of the upcoming change to off-payroll (IR35) working rules. But the review has already been branded ‘limited’ and ‘meaningless’ by industry experts.
The review will gather evidence from contractors and large and medium-sized businesses and will determine if any further steps can be taken to ensure the ‘smooth implementation’ of the reforms.
Legislators will need to act quickly, however, because the reforms are still due to take effect in April 2020.
Following an independent review of the controversial loan charge, the Government has launched a consultation on how it can tackle the use of these arrangements.
The loan charge was applied to contractors that participated in so-called ‘disguised remuneration’ tax avoidance schemes. In many of these schemes, contractors were effectively paid using ‘loans’ which did not have to be repaid.
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).
HMRC’s Check Employment Status for Tax (CEST) tool has been a touchy subject for contractors that want to find out if they will be inside or outside IR35.
The online tool was first introduced in 2017 to help contractors and their engagers judge employment status for tax purposes and, ultimately, how a contractor will be taxed.
The service asks a series of questions based on key legal criteria. It helps provide a judgement in most straightforward cases, with assistance in more complex cases available through a handbook and the HMRC call centre.
HM Revenue & Customs is in the process of issuing 43,000 letters to private sector businesses, warning them to consider the employment status of their contractors ahead of IR35 reforms in April.
These reforms mean that private sector engagers will be responsible for judging their contractors’ employment status for tax, rather than the individuals themselves.
An NHS consultant urologist is crowdfunding his challenge to an unfair IR35 classification on behalf of other independent healthcare professionals.
Providing his services to the NHS as locum, George Mantides and others in his position are treated as employees for tax purposes, but don’t receive any of the benefits that employees traditionally enjoy.