If there is one subject that makes any experienced contractor’s blood boil, it may well be IR35. Indeed, it has been the cause of considerable consternation among contractors for more than a decade now, with the Professional Contractors Group (PCG) having been formed in response to it. So, what has IR35 done to give rise to such ire over the years, and why might you appreciate the services of the IR35 accountants here at Freelancer Accounting (http://www.freelanceraccounting.com)?
Well, first of all, we need to properly establish what IR35 is. Termed ‘The Intermediaries Legislation’ in 2000, IR35 was announced in 1999 with the aim of stopping people working through their own personal service company whilst performing work as if they were an employee, all so that they could allegedly avoid tax. The target was individuals who set up as a contractor and worked through a Limited Company, and who could therefore, until that moment, be taxed as if they were self-employed – despite the work itself barely distinguishing them from an employee.
An example cited by HMRC is of an IT specialist leaving his permanent job one Friday before returning the following Monday as an IT contractor working through his own limited company. Despite doing exactly the same work as previously, he is only paying himself a small salary – on which tax and NIC is payable – with dividends providing most of his income, meaning that he pays less tax and national insurance. In reality, however, the legislation has been condemned by PCG on account of its “unfairness and complexity”, which highlights the necessity of accountants for contractors to advise on matters relating to IR35.
IR35 is seemingly clear in that it applies to those who carry out work through “intermediaries” to an end user under circumstances in which, if there was a direct contract between the contractor and the end user, it would be one of employment. However, the legislation is also so complex that contractors frequently struggle to correctly assess whether or not they fall within it, with their status possibly being dictated by contracts that they have never seen. That is unfortunate, not least given that those contractors who are outside IR35 pay considerably less tax than those inside it.
It’s obvious, then, that for contractors, it pays to find specialist accountancy services that can advise them on their IR35 status and make it easier for commercial relationships with clients to be constructed that are outside IR35. Although numerous cases have arisen that have made IR35 a little easier to understand, it remains the bane of many a contractor’s existence. Plus, with so many myths still flying around about IR35, it’s never been more important to have a PCG accountant by your side to ensure that you avoid the remaining pitfalls.
One of the most debated tax changes in recent years was the increase in income tax to 50% for those with annual income in excess of £150,000. Continue reading
With the rise of flexible working practices, more people are working as contractors than ever before. This has created a growing demand for accountancy services for contractors, so when it comes to choosing which provider to hire, it pays to look for their USPs (Unique Selling Points) to ensure you get the most for your money. At Freelancer Accounting (http://www.freelanceraccounting.com/), we are accountants for contractors with USPs that set us apart from the competition.
PCG Accredited Accountant
Just as for any services with increasing demand, providers can flood the market and not all are created equal. Given the importance of accountancy services to freelancers, helping them to run their financial and tax affairs smoothly, it is vital to secure the services of an accredited accountant. Not only is Freelancer Accounting a regulated ACCA (Association of Chartered Certified Accountants) practice, but we are also fully PCG accredited, which means we have undergone additional training regarding issues pertaining to tax and accounts for freelance workers in particular. This not only provides our contractor clients with the specialist expertise they require, but also gives peace of mind that they are getting the best possible advice from a trusted provider.
FreeAgent Online Accounting Software
By using our accountancy services, freelancers get to benefit from the FreeAgent online accounting software which streamlines and simplifies the accounts process specifically for contractors. FreeAgent allows our clients to pass the management of their accounts entirely over to us while still maintaining control and transparency. FreeAgent saves freelancers time and money and stress, something every contractor could do with!
Finally, something we hear on a gratifyingly regular basis is how happy our clients are to be dealing with accountants on a face-to-face basis. Freelancer Accounting understands that a contractor’s financial and tax matters are of great importance to them. Rather than just being hard data, this is information which is both private and at the very core of a contractor’s business. Therefore we believe that to give a personal, tailored and attentive service, accountants should be on hand to have face-to-face meetings at the client’s convenience. We have offices in Central London, Canary Wharf, Richmond, Reading and Guildford and can make our team available to meet a client in person to talk over their accounting affairs. We’re proud to offer personable yet professional accounting services in London for freelancers.
These are just some of the things which we believe set us apart from our competitors. Find out more about our full range of services and affordable fees at http://www.freelanceraccounting.com
This is an interesting question, and an interesting idea that is being discussed by the political parties at the moment is to provide good quality publicity and celebrate companies that make large contributions in taxes and are good corporate citizens whilst showing the companies that practice large scale corporate tax avoidance. Continue reading
Cloud computing seems to be really taking off in the UK, with a recent poll by SAGE finding that one in four businesses now use cloud computing to some degree and finding that half of these companies started using cloud computing within the last twelve months. Continue reading
HMRC have suffered a 48% rise in staff resignations in 2011/12 with a total of 1,629 HMRC staff resigning, this is up from 1100 in 2010/11.
Where HMRC seem to have suffered most is in the Personal Tax Department, this department impacts the service that the customers access the most. Continue reading
HMRC have over the last few years been targeting schemes where investors have been receiving tax benefits in excess of their contributions to the scheme.
Investors often put up just a fractions of the capital and rely on structured loans to ensure they obtain substantial tax reliefs whilst having only a limited exposure to their capital. They then use these losses against other income which would have been treated as taxable.
When these cases are brought by HMRC, the conclusion often depends on whether the arrangement is genuinely for business purposes and if there are any loans involved, do they serve an economic purpose?
Film sales and leaseback partnerships are on of these types of arrangements that have been hitting the headlines over the last few months.