Tag Archive for IR35

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Labour pledges to scrap IR35 rollout to business … and then backtracks

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Originally written by Timothy Adler on Small Business
Bill Esterson, the shadow small business minister, spoke out of turn this week when he pledged Labour would stop the rollout of IR35 tax changes to business.
Speaking on Monday night, Esterson pledged at a small business hustings in the City of London that Labour would scrap IR35 being extended to the private sector, despite there being nothing about it in Labour’s manifesto.
“We absolutely can’t see it rolled out into the private sector the way things are at the moment,” Esterson told the hustings.
“It should never have been implemented in one go.”
Asked later to confirm if it was Labour Party policy to review IR35 and not rollout changes out to the private sector in April 2020, he tweeted: “absolutely”.
>See also: Labour small business minister: ‘Boris just says whatever pops into his head’
However, that tweet was subsequently deleted:

Esterson told Small Business that Labour policy was now to review IR35 changes before they come into effect.
IR35 will draw sole traders and freelance contractors into the tractor beam of IR35, which HMRC sees at tax avoidance when freelance contractors are effectively permanent.
Liberal Democrat deputy leader Sir Ed Davey was the big winner at the City hustings, organised

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6 top tips to prepare for IR35 tax changes – Small Business checklist

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Originally written by Timothy Adler on Small Business
Nearly three-quarters of businesses are completely unaware of IR35 tax changes coming into effect this April.
From April 2020, company employers will have to decide whether freelance contractors are truly freelance or whether they are on open-ended contracts, saving employers money but which HMRC sees as tax and national insurance avoidance.
HMRC wants to crack down on freelance contractors with full-time positions in businesses, which it sees as abusing the system.
>See also: How to wind up your personal service company ahead of IR35 legislation
Seventy-one per cent of businesses surveyed by consultancy Sullivan & Stanley are unaware of the IR35 changes coming into effect on April 6 2020.
More than half of businesses surveyed (54pc) say they haven’t received enough information and 52pc say it’s contradictory or confusing.
Fewer than four in 10 firms (37pc) say they’ll have a strategy in place to cope with IR35 by the time changes kick in.
One fifth say they expect to be ready up to three months after IR35 is enforced, 32pc say four to six months after the change date, and nearly one in 10 (9pc) think it will take them anything between seven to 11 months beyond April 2020 to

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Small businesses call for HMRC to delay IR35 tax change

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Originally written by Timothy Adler on Small Business
Small businesses have called for the Treasury to delay its controversial IR35 tax change, which is meant to clampdown on employees passing themselves off as freelancers in order to avoid tax.
The government has already restricted freelancers working full-time in the public sector as contractors, which means they pay less tax than equivalent employees. As employers are the ones who face penalties if they categorise full-time contractors wrongly, it makes hiring sole traders less appealing.
>See also: How to wind up your personal service company ahead of IR35 legislation
Now the Treasury wants to extend its IR35 legislation to the private sector in April 2020.
Mike Cherry, national chairman of the FSB, said: “The self-employed certainly don’t need an IR35 rule change that makes hiring contractors less attractive. We’ve already heard noises from big corporates to indicate that, if this change does take effect in April as planned, they’ll pull the plug on sole traders.
“Common sense dictates that a delay to the April roll-out of these rules is now needed.”
Back in September, chartered accountants also called for the IR35 tax change to be delayed. The Institute of Chartered Accountants in England and Wales (ICAEW) said the date

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How to wind up your personal service company ahead of IR35 legislation

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Originally written by John Bell on Small Business
While the nation has been gripped by Brexit over the past three years, another hot topic for those in the contracting sector is the impact of the new off-payroll legislation, otherwise known as IR35. In particular, its ramifications when it’s rolled out to the private sector in April 2020.
We know that when the reforms hit the public sector in 2017 many public-service hirers put all contractors inside IR35 to avoid any comeback. Come April 2020 the same could happen.
Faced with being deemed an employee and unable to continue working through their own personal service company (PSC), many contractors will consider their options. Some could choose to work through a different model, such as an umbrella, but many contractors may decide to shutter their limited personal service company and pursue alternative paths.
So, how do you wind up your personal services company ahead of IR35 coming into effect next April?
‘Start the MVL conversation with your accountant now’
Voluntary strike off
A contractor closing a business can apply for voluntary company strike off at Companies House but a Members’ Voluntary Liquidation (MVL) may be more appropriate. A strike-off request could be turned down if a business has creditor

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Government fails freelancers as it presses for IR35 rules

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Originally written by Anna Jordan on Small Business
The Government has released its Draft Finance Bill, taking a step further in cementing changes proposed in this year’s Spring Statement.
We take a look at the measures which affect freelancers and small businesses.
IR35 to hit freelancers in private sector
The most controversial of the proposals is IR35, also known as ‘off-payroll’. This means that HMRC can tax sole traders if their role is akin to that of a full-time employee. In April 2017, these rules were implemented within the public sector and it looks as if they’re going to be brought in for the private sector from April 2020.
Freelancers are worried as if they’re classified as full-time employed they’ll be hit with PAYE while missing out on vital employment benefits such as sick pay and holiday entitlement.
The Federation of Small Businesses is calling on policymakers to delay implementation. It’s warning that it would be risky to bring in the changes following a sustained period of uncertainty, citing that it’ll cause ‘significant disruption’ to a quarter of a million sole traders.
FSB national chairman, Mike Cherry, labels this as a ‘reckless’ move:
“Left unamended, this bill could easily usher in an environment where firms in need of

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HMRC under fire over IR35 off payroll consultation

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HMRC’s consultation on IR35 is already under fire as critics accuse the government of underestimating the complexity of the task ahead and risking missing the opportunity to make the whole process more user friendly for a key sector of the UK workforce. The HMRC invite for input to a consultation on IR35 – the off
The post HMRC under fire over IR35 off payroll consultation appeared first on Small Business.

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TfL delays contradict HMRC who deny reform impacts sector

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Delays to critical TfL London Underground repair work due to the exodus of public sector contractors further contradicts HMRC’s claim that IR35 reform is not impacting contracting and the public sector, highlights Qdos Contractor of The Qdos Group. TfL recently revealed a ‘significant number’ of contractors stopped working on projects as a result of IR35
The post TfL delays contradict HMRC who deny reform impacts sector appeared first on Small Business.

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IR35 forum minutes highlight HMRC’s failures surrounding reform

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The contents of July’s IR35 Forum minutes reflect a sincere lack of understanding from HMRC when it comes to the true impact of recent and potential changes to IR35, leading contractor tax adviser, Qdos Contractor of The Qdos Group has suggested. Within the now published notes, HMRC failed to offer any clarity over potential reform
The post IR35 forum minutes highlight HMRC’s failures surrounding reform appeared first on Small Business.

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Majority of public sector contractors pass IR35 assessment

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Leading contractor tax adviser, Qdos Contractor of The Qdos Group, reveals that since April, the month of public sector IR35 reform, 89 per cent of public sector contractors have passed its rigorous, detailed status assessment and in their expert opinion, sit outside IR35. In the lead up to April 6th’s changes, in the months of
The post Majority of public sector contractors pass IR35 assessment appeared first on Small Business.

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Most contractors believe their input is needed for accurate IR35 decisions

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Eighty eight per cent of contractors do not believe public sector bodies and agencies are able to make accurate IR35 decisions without their input, research from Qdos Contractor of The Qdos Group highlights. Recent changes to public sector IR35 handed public sector clients and agencies the responsibility for determining employment status – a move which
The post Most contractors believe their input is needed for accurate IR35 decisions appeared first on Small Business.

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