Latest Contractors

HMRC: Finally release new Employment Status tool. The new public sector IR35 assessment rules come into effect on 6 April 2017 and contractors have been concerned that they are unable to confirm their IR35 status. HMRC has now released its long awaited online Employment Status Tool. The tool is available to contractors, engagers and agencies…

IR35: Proposals for off-payroll working in the public sector. HMRC has been consulting over the summer on reform of the intermediaries legislation, commonly termed IR35. The proposal, announced in the Budget 2016, is to move the responsibility for determining the tax status of engagements in the public sector by consultants and others operating through their…

New Liquidation Tax Rules: How to ensure capital tax treatment. Most contractors will be aware that HMRC introduced a new targeted anti-avoidance rule (TAAR) wef 6-Apr-16, that will make it more difficult to obtain capital gains tax treatment when profits are withdrawn from a company by way of liquidation or dissolution. Four tests have to now be passed…

In the Budget earlier this year the Chancellor announced that there would be a new rule aimed at stopping tax avoidance when a limited company is wound up and funds are distributed to the shareholders. Where certain conditions are met, the distribution will be treated as income in the hands of the shareholders rather than…

IR35: HMRC research into making clients responsible for compliance. HMRC have undertaken research to understand how employers would react if made responsible for operating IR35 on behalf of their contractors. HMRC are keen to level the playing field between employees and those who use a limited company to work in a similar manner, as they…

Contractors: Don’t pay too much flat rate VAT. Just three weeks ago it was reported that the VAT flat rate scheme guidance was flawed. The ATT had highlighted that HMRC’s practice was costing traders, as they were forced to pay more VAT to HMRC under the flat rate scheme than the law required. HMRC has…

IR35: Could proposed changes actually result in lower taxes for HMRC? As previously reported, the government are consulting into reforming IR35 for public sector workers. They wish to make public sector engagers responsible for determining the IR35 status of the their contractors. Research by ContractorCalculator has predicted these proposals will result in a £115m tax loss…

Office of Tax Simplification: Suggest look-through companies, to deal with IR35. The OTS have been reviewing the taxation of Personal Service Company’s, with the aim of dealing with the “issue of IR35”. They are recommending the shareholders of PSC’s pay income tax on the company profits directly, instead of via corporation tax. This “look-through” taxation…

Budget 2016: The end of public sector contracting? It was announced in the Spring Budget 2016 that engagers in the public sector will be responsible for deciding the IR35 status of their contractors from April 2017: Click here for the PDF It is estimated that 20,000 Personal Services Company’s working in the public sector are avoiding…

10% Tax Rate: Loophole closed for serial liquidators. The 2015 Autumn Statement, recently published as the Finance Bill 2016, introduces a new targeted anti-avoidance tax rule to stop contractors regularly liquidating their company then starting a new company, to extract profits at a personal tax rate of just under 10% rather than the usual effective rate of 25%+:…