Key tax dates and deadlines for 2018/19
It is an inevitable reality that, for anyone earning a livin...
By Jonathan London on 22nd July 2015
The government is inviting contractors and self-employed people to share their views on planned reforms of the controversial and oft-criticised IR35 regulations.
Last Friday (July 17th 2015), HM Revenue & Customs (HMRC) published a new IR35 consultation document outlining initial ideas for amending its existing intermediaries legislation, with the deadline to contribute set to run until September 30th.
IR35 was first introduced by HMRC in April 2000 as a means of ensuring so-called ‘disguised employment’ is taxed at a rate similar to traditional employment. Specifically, it aims to ensure people who would normally be treated as a full-time employee, but supply their services via a personal service company, cannot falsely make tax and National Insurance savings.
However, it has proven unpopular due to the amount of grey areas this creates for self-employed people and the subsequent regulatory burdens they therefore need to deal with. The government has also noted that non-compliance is widespread, with many cases occurring where two people are doing the same job but paying very different levels of tax depending on how they are engaged.
Having pledged in its recent Budget to open a dialogue with businesses on how to improve the effectiveness of the law, the government’s new document has laid out the substantial costs to HMRC of non-compliance with IR35 – around £430 million a year – while laying out some potential options for improvement.
These include further enhancing the administration of the rules or HMRC’s compliance response, though it was acknowledged that neither of these steps will be enough to address the problem on their own.
It believes allowing engagers to take on more of a role in ensuring that the right amount of employment taxes are paid may be more effective, while conceding the additional burden this would create. As such, HMRC is actively seeking opinions on this and other possible ideas.
The document said: “HMRC will engage with stakeholders over the next few months to explore options to make the legislation more effective in protecting the Exchequer and levelling the playing field between direct employees and those who work in a similar manner to direct employees, but through their own limited companies.”
Despite acknowledgement of the problems with IR35, the government document maintained that the abolition of the regulations – as previously called for by the Association of Independent Professionals and Self Employed (IPSE) – is still not an option.
Take a look at our recent blogs below.
As a business owner, your time is way too precious to spend hours dealing with HMRC or Companies Hou...
Published: 14th May 2018
“Never do tomorrow what you can do today. Procrastination is the thief of time” Charles Dicken...
Published: 11th May 2018
Congratulations! The very fact you clicked this far shows you are considering employing staff, and t...
Published: 17th April 2018
It is out with the old and in with the new when it comes to tax relief on childcare costs from April...
Published: 9th April 2018
The Boox accounting app has always been at the forefront of helping our clients understand their com...
Published: 26th March 2018
Spring has officially sprung and the start of the 2018/19 tax year is just around the corner –...
Published: 23rd March 2018
If your business is employing staff, you should already have a workplace pension in place, under the...
Published: 23rd March 2018
At this time of the year we are used to seeing the Chancellor holding aloft the red box ahead of the...
Published: 15th March 2018
A dispute has erupted between the BBC and 170 of its presenters over their tax arrangements and thei...
Published: 12th March 2018
The rush for taxpayers to file their 2016-17 self-assessment tax return is over for another year, an...
Published: 27th February 2018
If you are in the process of setting up a limited company or you are already the owner of an incorpo...
Published: 16th February 2018
If you need a little help to find the right accountancy service, don’t worry.
Get in touch with our friendly team for a FREE service consultation.
Thousands of contractors, freelancers and locums turn to Boox for help and advice with their limited company accounting. They love our personal service and app.
Specialist accounting for sole traders and the self employed, Boox combines easy online tools with expert support to take away the stress of handling your accounts.
Our combination of market-leading accounting software and expert personal advice gives you greater financial control and more time to grow your business.