Tax & IR35 News

Are Umbrella companies still relevant?

Temporary workers need to consider their arrangements

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The Low Incomes Tax Reform Group (LITRG) is urging workers to consider their relationship with Umbrella companies carefully, particularly as the key advantage of travel expenses has all but been closed off.

Read more...

Companies through the looking glass

Is lookthrough taxation viable?

Earlier this year, the Office of Tax Simplification (OTS) made a number of suggestions on how to simplify tax for micro businesses, in their ‘Small Company Taxation review.’ The report contained the idea of a lookthrough taxation model which the OTS want to develop further and, with this in mind, have recently published a discussion paper inviting comments by 12th September or 30th September by the very latest.

Read more...

Reforming IR35

End users want no responsibility for IR35

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One of the options for reforming IR35 mentioned in last year’s discussion document was for engagers to take on more responsibility for ensuring that the right amount of employment taxes are paid. End clients would therefore take a more active role and would have to consider whether or not IR35 applied to the engagement.

Read more...

It never Raines, it pours

Shareholding mix-up costs taxpayer over £41K

Confusion about who held shares in a PSC ended up costing Terence Raine £41,540 in tax and penalties.

Read more...

Your View: Public Sector Guidelines

Public Sector Survey Results


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Public sector guidelines are under the spotlight again for the fourth year running. The most recent developments - pencilled in to be applied from April 2017 -  which puts the engager (or agency) in control of the contractors’ IR35 future - are clearly cause for concern and not just for public sector contractors, but possibly for all private sector contractors too (as suggested in the IR35 consultation last year).

Read more...

Philip Hammond and IR35

What can contractors expect from Philip Hammond? While his predecessor triggered a wave of change for public sector contractors following the 2016 Budget, what do we know about our new chancellor of the exchequer, and his stance regarding IR35 and the contracting industry?

Read more...

HMRC’s IR35 status tool ‘doomed to fail’ says industry expert

HMRC is trying to achieve the unachievable in its bid to develop a comprehensive online IR35 test that provides a definitive result for each user. This is according to contracting expert Dave Chaplin, founder and CEO of ContractorCalculator.

Read more...

IT consultant imprisoned for tax fraud

Tax cheat sent down for tax and child support dodging

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Hamauon Khan, an IT consultant from Crawley received a prison term of four years for avoiding paying tax of more than £170K.

Read more...

Contractor Doctor

Terminated Contracts

Q. My agency terminated my contract with no notice whatsoever, in breach (I believe) of the contract between us, and furthermore are refusing to pay any notice period, claiming "only worked days are paid". I believe the contract requires them to give the proscribed period of notice of termination, which they did not do. As a result I am significantly out of pocket because of travel & accommodation expenses etc. The agency are now being evasive & uncommunicative (seems like they're ignoring me in the belief/hope that I'll give up & go away). What steps can I take to force the agency to abide by their contractual obligations?

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New to Contracting

Q. I work in Fin Serv, I'm leaving employment and new to contracting - looking to pick up my first contract over the next couple of months. Where can I get help/hints on writing an effective business profile and where would I find a list of agencies and job sites to post my availability on?

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Contract Amendments: Rate Reduction

Q: My client verbally informed me on the 7th June that the day rate would have to be cut by 10% by the 20th June. I have since received a letter on the 28th June confirming the 10% rate reduction is to be applicable from the 21st June. As I received no official communication until the 28th June, can this rate be backdated? I have not received a contract amendment to confirm the new rate reduction. Should this contract amendment be in place before I can accept the rate reduction?

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Making Tax Digital

Q. If travel & subsistence is going to be allowable on some contracts & not on others & HMRC is to press ahead with Making Tax Digital, it will be interesting to see how the much heralded "free" software that will enable all business to computerise their accounts will handle this. The proposal is that the software will enable the business to send in 4 tax returns a year, to keep their tax fully up to date. This is apparently a labour saving initiative by HMRC. You could not make it up.

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Travel & Subsistence in Practice

Q. If a contractor is caught by the SDC test or is in IR35, how does the travel & subsistence disallow-ability work in practice? I understand how it can be excluded from corporation tax deductions, but does it need to be disclosed on a P11D? I attended a PAYE seminar this week & asked HMRC if contractor disallowable expense claims needed to be put on a P11D & they said that providing the expense claim was to reimburse expenses incurred it did not, from 6/4/16. What is the situation if the client asks the contractor to visit a remote office, which they would usually reimburse their own staff for visiting? Does it make any difference if the client pays the travel & hotel bill direct?

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IR35 Redundancy Payment

Q. If IR35 applies, all payments to the intermediary are treated as your employment income and the intermediary must pay any tax and National Insurance contributions due. It ensures that you pay roughly the same amount of tax and National Insurance contributions as if you’d been directly employed by the client. With an IR35 situation coming to an end (the contract is terminated) is it acceptable/legitimate to use some of the final revenue to fund a tax and NI free redundancy payment to the contractor?

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Property Investments

Q. I am accumulating money in my company's account which I can't take out and I'd like to invest in funds and property. What investment platforms allow me to invest that money as my company and are there any special considerations when it comes to buying property as my company?

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Retirement: Directors Pension

Q. I am registered as ltd company and wish to retire. Can I use the balance of capital in the business to fund a directors pension and take the penion immediately?

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Tax & IR35 News

Are Umbrella companies still relevant?

Temporary workers need to consider their arrangements

umbrella icon

The Low Incomes Tax Reform Group (LITRG) is urging workers to consider their relationship with Umbrella companies carefully, particularly as the key advantage of travel expenses has all but been closed off.

Read more...

Companies through the looking glass

Is lookthrough taxation viable?

Earlier this year, the Office of Tax Simplification (OTS) made a number of suggestions on how to simplify tax for micro businesses, in their ‘Small Company Taxation review.’ The report contained the idea of a lookthrough taxation model which the OTS want to develop further and, with this in mind, have recently published a discussion paper inviting comments by 12th September or 30th September by the very latest.

Read more...

Reforming IR35

End users want no responsibility for IR35

ir35 icon

One of the options for reforming IR35 mentioned in last year’s discussion document was for engagers to take on more responsibility for ensuring that the right amount of employment taxes are paid. End clients would therefore take a more active role and would have to consider whether or not IR35 applied to the engagement.

Read more...

It never Raines, it pours

Shareholding mix-up costs taxpayer over £41K

Confusion about who held shares in a PSC ended up costing Terence Raine £41,540 in tax and penalties.

Read more...

Your View: Public Sector Guidelines

Public Sector Survey Results


stats icon

Public sector guidelines are under the spotlight again for the fourth year running. The most recent developments - pencilled in to be applied from April 2017 -  which puts the engager (or agency) in control of the contractors’ IR35 future - are clearly cause for concern and not just for public sector contractors, but possibly for all private sector contractors too (as suggested in the IR35 consultation last year).

Read more...

Philip Hammond and IR35

What can contractors expect from Philip Hammond? While his predecessor triggered a wave of change for public sector contractors following the 2016 Budget, what do we know about our new chancellor of the exchequer, and his stance regarding IR35 and the contracting industry?

Read more...

HMRC’s IR35 status tool ‘doomed to fail’ says industry expert

HMRC is trying to achieve the unachievable in its bid to develop a comprehensive online IR35 test that provides a definitive result for each user. This is according to contracting expert Dave Chaplin, founder and CEO of ContractorCalculator.

Read more...

IT consultant imprisoned for tax fraud

Tax cheat sent down for tax and child support dodging

prison icon

Hamauon Khan, an IT consultant from Crawley received a prison term of four years for avoiding paying tax of more than £170K.

Read more...

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