Originally written by Timothy Adler on Small Business
The Government has voted through IR35 reform, which will bring millions of freelancers and contractors into pay-as-you-earn from April 2021.
IR35 puts the onus on employers to decide whether freelance contractors should pay national insurance will take effect from April 21 2021.
Contractors argue that although they will be taxed like regular PAYE employees, they will have none of the benefits of full-time staff, being both still on short-term contracts with no paid holiday.
>See also: Taxman will not fine you for getting things wrong with IR35 within first year
What is IR35 and how does it affect me?
Currently, contractors assess their own tax status, but impending reforms coming into force from April 6 2021 will shift this responsibility to hiring businesses.
The Government has proposed the changes to contracting tax rules in the private sector to combat what it calls “disguised employment”, where contractors do essentially the same work as employees but play less tax and reduced national insurance contributions.
Currently freelance contractors, one-man-band limited companies who work on projects for companies, pay corporation tax at 20 per cent instead of higher PAYE rates, while employers duck national insurance contributions. The Treasury sees both freelancers and employers as
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IR35 freelance tax changes will go ahead in April 2021 – are you ready?
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
The Government has voted through IR35 reform, which will bring millions of freelancers and contractors into pay-as-you-earn from April 2021.
IR35 puts the onus on employers to decide whether freelance contractors should pay national insurance will take effect from April 21 2021.
Contractors argue that although they will be taxed like regular PAYE employees, they will have none of the benefits of full-time staff, being both still on short-term contracts with no paid holiday.
>See also: Taxman will not fine you for getting things wrong with IR35 within first year
What is IR35 and how does it affect me?
Currently, contractors assess their own tax status, but impending reforms coming into force from April 6 2021 will shift this responsibility to hiring businesses.
The Government has proposed the changes to contracting tax rules in the private sector to combat what it calls “disguised employment”, where contractors do essentially the same work as employees but play less tax and reduced national insurance contributions.
Currently freelance contractors, one-man-band limited companies who work on projects for companies, pay corporation tax at 20 per cent instead of higher PAYE rates, while employers duck national insurance contributions. The Treasury sees both freelancers and employers as
Hot Business News Today
Self-Employed Income Support Scheme now open for applications
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
HMRC has opened its Self-Employed Income Scheme for applications here.
Around 3.5m self-employed freelancers and contractors will already have been contacted by HMRC, deeming that they are eligible for the Self-Employed Income Support Scheme (SEISS).
Freelancers and the self-employed can apply for a one-off payment of up to £7,500 covering three months. This is based at looking at your tax returns for the past three years and then averaging your monthly income. Only freelancers and the self-employed who have been earning up to £50,000 a year can apply for the self-employed coronavirus income support scheme.
>See also: Self-employed Income Support Scheme what it means for you
The grant does not need to be repaid but will be subject to income tax and national insurance.
Money should hit bank accounts by May 25 or six working days after a claim is made.
However, the Treasury is already thinking about dropping the ceiling for self-employed support to £30,000 when the scheme is extended.
And the Self-Employed Income Support Scheme does not cover owner-directors of small businesses. Treasury believes it would be too difficult to calculate an average of three years’ worth of self-employed income from the tax returns of owner-directors, which include