hmrc Articles

marketing | 21 March 2016
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The Chancellors fourth Budget in 12 months arrived on Wednesday and it confirmed a number of policy changes that we already knew were going to arrive. Restrictions on Travel and Subsistence tax relief for IR35 contractors and changes to the dividend tax will take effect as planned in April.

The most significant new announcement will be of concern to contractors working through a personal service company (PSC) in the public sector.

An HMRC policy document reveals that from April 2017, public sector organisations will be responsible for enforcing IR35. This marks a significant change from the current system, whereby the PSC or agency judges whether a contractor is caught out by IR35.

Effectively, this means that many more public sector contractors will fall under the remit of IR35 legislation and will receive less take home pay as a result. This change is scheduled to take effect in April 2017 following a consultation. 

marketing | 20 January 2016
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A controversial proposal that could see small business owners forced to update their tax bill four times a year will be debated in parliament next week, after an online petition was signed by more than 100,000 people.

The parliamentary petitions committee, which handles online petitions, has scheduled a debate on ‘quarterly tax returns’ for the afternoon of the 25th of January.

Small business owners reacted angrily when the proposal was first announced by Chancellor George Osborne at his Autumn Statement. To vent frustration, business owner Paul Johnson started an online petition that has since been signed by over 107,000 people. 

Self-employed workers, landlords and small business owners are all faced with the prospect of having to fill out four tax returns every year.

Filing accounts quarterly will bring small operations, who currently only have to send their accounts to HMRC once a year, into line with large corporations. Some believe that the extra administrative burden could be harmful to taxpayers but we believe that Umbrella.co.uk accountancy customers will fare better than most.

The plans, which were only recently discovered having been slipped into the small print of George Osborne’s Autumn Statement, will affect around four million Britons. 

HMRC, the UK’s tax authority, has announced that 137 local tax offices are to be closed and replaced with 13 regional tax centres. The announcement which comes after reports emerged that taxman failures were costing the public purse. It has stoked fears of job losses and short term disruption to the tax system.  

A lot of small business owners put off getting VAT registered because they find it daunting. But VAT doesn’t have to be taxing. The Flat Rate VAT scheme makes it easy, and it can help boost your post-tax profits too.

The Flat Rate VAT incentive is a popular choice for independent contractors, sole traders and directors of small limited companies. Read on to find out if it is right for you as well.   

How Flat Rate VAT works

The Flat Rate VAT scheme is a government incentive designed to simplify taxation and get more small businesses growing. 

Did you, like many others, have to run the mad dash to get your tax return finished over the weekend?

HMRC estimates that around six per cent of tax returns are filed on the 31 January deadline day each year. For those leaving it to the last minute, HMRC’s online filing system can be slower than normal and the automatic £100 penalty for late filing is a constant threat. 

How can you avoid this deadline day rush in years to come? Here are our top five tips for a stress-free 2016-17 tax year. 

marketing | 13 January 2016
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Here at Umbrella Accountants we’ve seen a number of instances recently where clients have chosen to complete their own self-assessment tax returns but completed them incorrectly resulting in large tax bills.

It’s vitally important to understand that being a Director and Shareholder of a Limited Company doesn’t class an individual as being “Self-Employed”.  If these sections are completed using information from the Limited Company accounts it can result in not only a nasty tax bill but also charges for Class 4 National Insurance that can also run into thousands.

A shock employment law regulation which could be announced at the Autumn Statement on the 25th of November has been heavily criticised by large portions of the contracting community. Currently it is unclear when it will come in, if at all.

The rumoured policy proposal, which many insist is still only a rumour, would mean that contractors using personal service companies like Umbrella.co.uk would be obliged to move onto a client’s PAYE system if their contract ran longer than one month. 

Last week, MPs warned that the quality of customer service at HM Revenue and Customs (HMRC) was so poor that it could be could be costing the country money.

In a strongly worded report, members of the Public Accounts Committee (PAC) accused the tax office of only answering half of the calls to its customer service team. MPs also cautioned that those running tax evasion and tax avoidance schemes were “running rings around the taxman".

Committee statistics said that HMRC responded to 72.5 percent of calls in 2014-15, a rate that dropped to 50 percent in the first half of this year.

Although the customer services team have a target of answering 80% of phone calls within five minutes, the damning report said that operators were only getting to 39% in this time. 

marketing | 20 July 2015
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On Friday HMRC released the discussion document inviting contributions from the industry on how best to police the murky area of disguised employment.

At first glance the consultation seems conflicted proposing two equally unsatisfactory options and then asks for someone else to come up with the magic solution for this thorny issue.

Perhaps the most concerning element of the document can be found on page 8 where it is suggested that the engaging party rather than the PSC be held responsible for the deduction of TAX and NI exactly as they would for a normal employee. Based on how open to interpretation the current legislation is and how few successful cases HMRC bring against contractors it is surely unfair to expect the engager in these circumstances to make that decision and then enforce it onto a supplier that they want to keep on side.

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