Messages

1

Arte / IR35 Insurance- The Dialogue in the region : Find out more about IR35 Insurance

« on: September 24, 2011, 11:38:33 PM »

In 1999, as part of that year’s Budget, the UK’s Chancellor of the Exchequer, Gordon Brown, declared that strategies could be initiated to resist tax reduction via so-called personal service firms. Appropriately identified as the “intermediaries legislation”, it truly is more typically referred to by the consecutively-numbered Inland Revenue (now HMRC) spending budget press release number 35 in which it was announced (i.e. the 35th press release of that year), titled IR35: Countering Avoidance within the Provision of Personal Services. The press release was issued on 9 March 1999, the exact same day as the Chancellor of the Exchequer's spending budget statement.
 
Currently the whole process is slightly misleading.  When HMRC approach contractors to arrange an Employer Compliance Visit, no mention is ever produced of IR35 and for the uninitiated; the matter is portrayed as a 'normal' PAYE visit.  And yet, take into account the Top 10 areas that HMRC are seeking for in a 'normal' Employer Compliance Review: Termination payments, Status issues when the business engages workers, Expatriate payments, Entertaining, Company Cars & Fuel, Construction Industry Scheme, Personal incidental expenses, Aggregation of earnings, Travel & Subsistence, Long Service Awards. How numerous of these issues are relevant to a contractor?  In fact how much paperwork is involved in maintaining the PAYE records for a contractor?  Assuming, that these are even held by the contractor - most will surely be reliant upon their accountant for the completion of the payroll and also the P11D and P35 returns that must be completed.
 
The Revenue argued that if the agency or the PSC had been removed, a large number of contractors would really be “disguised employees” who should be included on the client payroll and have tax and NIC deducted each and every month. The Government announced the “rule changes” which would take effect from 6 April 2000. The first reporting and payments could be due from 19 April 2001.
 
Does IR35 affect all contractors? Yes, within the sense that all contractors should consider IR35 and take action to protect themselves from it. Nevertheless, not all contractors are caught by IR35. Determining regardless of whether you are caught by IR35, (or being ‘inside IR35’) depends on a number of factors. It really is not entirely objective whether a contractor is caught and depends on the terms and conditions in the contract, together with the contractors operating arrangements. Being inside or outside IR35 is not a black and white issue. Estimates are that 20% of contractors are definitely inside IR35, 20% are definitely outside and also the rest are in a grey area in the middle.
 
In case you determine oneself to be outside IR35 but, on close inspection, the Inland Revenue decides otherwise, you could be in for a substantial bill. HMRC are actively looking for and clamping down on non-compliance, so you have to make sure you’re whiter than white. We have the experience and in-depth knowledge needed to make a thorough assessment of your personal circumstances and specific contract to determine your IR35 status and offer accurate advice. (Click here to see how we helped an IT contractor faced using a back-dated tax bill.)
 
More info has arrived at: ir35 insurance and ir35 accountant and also Cooking games for girls

2

Corsi di altre Facoltà / IR35 Insurance- The main Dialogue belonging to the region - Discover more about IR35 Insurance

« on: September 24, 2011, 05:59:29 PM »

How you can stay away from an IR35 Investigation. You can find no guarantees, but one really good guiding principle would be to 'Get your defense in place now'. Steer clear of setting up firms with £2 or £100 share capital; consider issuing £1,000 worth of share capital - it suggests a much more 'substantial company'.  Take into account the level of salary/dividends paid; do not make oneself a target for a Status Inspector trying to maximize the tax possible for HMRC.
 
The statement was basically seeking to clampdown on these so-called one-person services companies. That is, individuals who, while ostensibly acting as staff of a company, stay away from PAYE by instead charging for their services under a contract. Under the rules, a contractual worker falls under IR35 if he or she (the ‘worker’) works for a client but does not invoice the client directly for function carried out, instead: the client contracts an intermediary organization, which then successfully employs the worker. It is easier for the client - if dissatisfied - to dispense with the services of the intermediary than it would be if it employed the worker directly. The client also avoids PAYE or NI tax issues; the intermediary business, in which the worker has at least a 5%beneficiary interest, then invoices the client for the worker’s efforts; the worker takes their earnings in the form of a dividend (a distribution of net profits of the organization to its shareholders) on which NIC aren’t paid.
 
Take into account the industry at the finish of every contract and keep records of all contract negotiations, successful or otherwise not. You could not have substituted, but keep records of potential substitutes whom you could use; similarly, maintain details of matters which show fiscal risk such as contracts which were terminated too rapidly, periods without work and personal losses that you may have produced (e.g. on fixed price work).
 
Essentially, you will likely be deemed to be an employee - but not of the Finish Client, nor of the agency, they are both off the hook - it will probably be your organization that will have to meet the additional tax liability below the “Deemed Salary Calculation”. It really is impossible to quantify with any accuracy what that additional tax burden is going to be without knowing the specifics of each and every case - the turnover of your organization, the amount taken by the shareholder(s) as salary, the amount distributed as a dividend - but as a quite rough guide, the likely cost to you will probably be equivalent to the Employer’s and Employee’s National Insurance Contributions not paid as a result of paying dividends, plus interest and if they can, HMRC will also seek to levy a penalty.This could add at least another 25% to your tax bill.
 
IR35 only applies if the individual is working for a client under circumstances where if it were not for the presence of a limited organization or partnership (recognized as the "intermediary") it could be one of standard employment. The HMRC argues that in these situations the individual is deemed a "disguised employee".  Anyone working by way of an intermediary is going to be caught by the new rules if they fail the 'IR35 test'. This test determines whether the person would be an employee if they had been contracting directly with all the 'client', rather than using this intermediary.  If their terms and conditions or working practices are of employment then they will likely be 'caught' by IR35 legislation.
 
Addiitional information will be here at: Cooking games for girls and Cooking games for girls and also Cooking games for girls