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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.
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.
The Treasury has confirmed that the 2019 Loan Charge will take effect this week, despite appeals from MPs, members of the House of Lords and Loan Charge campaigners.
HMRC released a last-minute statement on Wednesday, reminding Loan Scheme users that they have an obligation to pay the tax owed.
The statement urged users of disguised remuneration schemes to come forward and settle their debts by April 5. The tax authority also said that ‘flexible’ payment options are available to those that worry they will not be able to pay.
The deadline for submitting your online self-assessment tax return and paying any tax due is 31st January 2019. This is only just over three weeks away….but don’t panic!!
Accountants are being booked up quickly as time runs out but at Umbrella Accountants, we always plan for the last-minute rush! We have capacity to help you with your self-assessment – provided you don’t leave it until the very last minute!! Plus, if you quote ‘2019SA’ we will give you a 25% discount off the current fee!
If you miss the deadline by up to three months, then you will get an automatic penalty of £100. You could have to pay more if it is later than three months or if you pay the tax bill late.
So, what do you need to do to avoid the last-minute stress and heartache? Here are our top tips.
If you contract through a limited company, there are certain expenses that you can claim against your income to reduce your tax liability.
If your limited company makes £50,000 and you claim back £10,000 in allowable expenses, the taxable profit will be £40,000.
There are some rules governing what expenses limited company contractors can claim.
If you pay taxes through HMRC’s Self Assessment system, you need to make sure you settle your second payment on account by the end of this month.
A payment on account is an advanced payment towards your tax bill, including income tax and Class 4 National Insurance if you’re self-employed.
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.
With less than a week to go until the 31 January Self-Assessment deadline, HMRC has provided a bit of light relief by posting some of the weird and wonderful excuses from people who have missed the deadline in the past.
One late filing Brit tried to blame his mother in law, another tried to blame a junior member of staff and one even blamed the postbox.
The tax authority also posted a list of failed expense claims that people have tried to get away with, including five years’ worth of woolly underwear.
As Christmas draws closer, many contractors will be finalising their plans for the festive season.
You know who is in charge of wrapping presents, what time you’re going to travel to the in-laws and who’s cooking the turkey. But you shouldn’t forget about the tax return deadline in amongst all the merriment.
After all, you only have until 31 January to complete and pay your Self-Assessment.
Last week, we covered some of the biggest Budget announcements and how they would affect contractors. This included a big change to private sector IR35 rules and other smaller changes to tax and spending.
Buried a little deeper in the Chancellor’s Budget statement, we uncovered one more change that pushes HMRC further up the payment pecking order when a business goes insolvent.
