private sector Articles

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.

 

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.

HMRC Launches Private Sector IR35 Consultation
marketing | 6 March 2019
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HMRC has launched a fresh consultation on changes to off-payroll Intermediaries Legislation (IR35), due to take effect in the private sector from April 2020.

The changes would see reforms introduced in the public sector in 2017 extended to the private sector.

The change will affect contractors that operate through an intermediary like a limited company or personal service company (PSC).

Instead of judging their own IR35 status, the private sector organisation that engages the contract will make this decision. It could mean that more contractors are deemed ‘inside IR35’ and liable to  pay income tax and National Insurance contributions.

Private Sector IR35 Reforms: What It Means for You
marketing | 30 October 2018
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The Treasury released new guidance on off-payroll working (IR35) in the private sector yesterday, following the Chancellor’s Budget speech.

Following a consultation on the rules, some commentators expected IR35 reforms to take effect from next year. But the policy paper reveals that the changes will be introduced in April 2020, giving businesses more time to prepare for the reforms

We’ve combed through the policy document, picking out the key points so you can understand how the changes will affect you.

Private Sector IR35 Could Cost Contractors £14,000
marketing | 19 June 2018
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As the government consults on plans to extend IR35 rules to the private sector, self-employment organisation  IPSE claims that the changes could ‘strangle’ contractor living standards.

IPSE claims that the ‘inhibiting, anti-business’ policy could cost contractors an average of £14,000 per year in lost income.

Using average day rate (£430) and average weeks worked (42 weeks per year) figures from IPSE’s Freelancer Confidence Index, they calculate that a contractor’s take home pay will drop significantly.

One-in-Five Sole Traders Needlessly Preparing for IR35 Reforms

New research indicates that one-in-five UK sole traders are preparing for the upcoming changes to off-payroll working rules in the private sector, despite the fact that the legislation will not affect them.

Completed by the Freelancer & Contractor Services Association (FCSA) professional body and cloud accounting software provider FreeAgent, the research found that 18% of sole traders were making preparations for the new rules when they would not affect their business type.

marketing | 12 March 2019
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Large and medium sized private sector organisations have just over a year left to prepare for important changes to IR35 legislation.

When similar changes were introduced in the public sector in April 2017, many organisations were woefully underprepared. In the most serious cases, public sector organisations made costly errors and saw major projects delayed.

Getting ready for April 2020 requires effective leadership and co-operation across departments and business areas.

In this blog post, we will provide a brief introduction to the changes before detailing what different teams can do to prepare.

 

What expenses can limited company contractors claim

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.

Chancellor takes aim at private sector contractors
marketing | 15 October 2018
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Media reports suggest that the Treasury is planning to overhaul IR35 tax rules with a costly policy for limited company contractors.

The move, which could be announced in this month’s Budget, would see public sector IR35 compliance rules extended to the private sector.

Just like public sector bodies, private firms would be responsible for ensuring that off-payroll personal service company contractors stick to the IR35 rules.

If a firm deems a contractor to be ‘inside-IR35’, the contractor would need to be placed onto the company’s payroll and would be liable to pay higher national insurance contributions.

Government seeks views on IR35 non-compliance in the private sector

The government wants to hear from you as part of an attempt to tackle IR35 non-compliance in the private sector.

It comes after changes to IR35 rules in the public sector caused problems public authorities and contractors

Also known as off-payroll working, IR35 rules are designed to stop employees working and paying taxes as if they were contractors.

The rules apply to contractors working through personal service companies who, if they were engaged directly by the company, would effectively be employees.

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