public sector Articles

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.

Some public sector contractors missing out on 30% of income after IR35 changes

Some self-employed contractors lost 30% of their income in the wake of IR35 reforms that took effect in the public sector this in April.

As the dust settles around the changes IT recruitment company, CW Jobs, found that more than 70% of their clients saw a reduction in income after the IR35 reforms.

Of these contractors, a quarter saw a reduction close to 30%.

The IR35 reforms mean that contractors who work solely or primarily for public sector bodies are being taxed as if they were regular employees of that company. But are no receiving any of the accompanying benefits such as such pay or holiday entitlement. 

The chaotic introduction of the new IR35 rules
marketing | 16 June 2017
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The controversial changes to IR35 legislation, which affect contractors working in the public sector, have been in place for more than two months now. Already it is clear that the new tax policy has had a number of unintended consequences that have made life more difficult for contractors and the public sector organisations that want to employ them.

April IR35 Changes. Now is the time for public sector contractors to act
marketing | 27 February 2017
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Changes are coming to Public Sector contracting in April 2017.

The key area which could affect your company in April will be the following;

Change
From 1st April this year many Limited Company Contractors working on a contract for a Public Sector institution will be classed as “Inside IR35” which means that the income from that contract will be taxed as if it was employment income. This can drastically increase the tax burden on the company.

FCSA blasts public sector IR35 changes
marketing | 10 February 2017
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A professional contractor employment services body has been scathing in its criticism of the changes to the off-payroll public sector changes, due to take effect in less than two months.

The Freelancer & Contractor Services Association (FCSA), which represents more than 110,000 contractors in the flexible workforce sector, said that the changes raise problems associated with accountancy, points of law and practicality. 

Government to ban slow paying contractors from public works

The Government has said that it will ban tier one contractors from bidding for work if they don’t pay their suppliers promptly.

As part of a broader package of measures designed to protect smaller businesses, the Government announced plans to exclude suppliers from major Government procurements if they cannot demonstrate “fair and effective” payment practices with their subcontractors.

Updated IR35 rules for public sector contractors
marketing | 17 July 2017
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HM Revenue and Customs (HMRC) has released more information about the rules governing off-payroll contractors in the public sector.

HMRC updated its guidance on the rules, which have been in effect since April.

The updated guidance clarifies some sticking points that have confused contractors for months.

Since 6 April 2017, responsibility for determining IR35 status has passed from public sector contractors, operating through an intermediary, to the public sector body engaging the contractor.

Although the fundamental rules are the same, the April change is seismic in terms of how the rules are applied. 

marketing | 3 April 2017
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There will be a number of things changing this April, some of which will affect them negatively.

We assess the changes and suggest some tax-efficient ways for contractors to respond.

marketing | 24 February 2017
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A team of thirty personal service company (PSC) contractors have agreed to abandon an already overrunning NHS IT project, after the Guy’s & St Thomas (GSTT) hospital trust said that the contractors would be declared ‘inside IR35’ from April.

Off-Payroll Working in the Public sector – New Legislation 6th April 2017
marketing | 18 January 2017
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As you may already be aware the Autumn Statement delivered a number of measures which effect the contracting sector including changes to IR35 and the VAT Flat Rate Scheme. The government has published a new policy document detailing the changes to IR35 and off-payroll working rules for public sector workers. View document here.

The Changes

PSC or “Limited Company” Contractors operating in the public sector will no longer get a say on whether or not the IR35 ‘intermediaries’ legislation’ applies to them. Consequently if they chose to continue being paid via their limited company, the contractor’s intermediary (Agency / Public sector body) will have to agree to deduct the appropriate TAX and National insurance as the ‘fee payer’.

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