 |
Contractor Tax Protection
Tax Liability Cover (TLC35) and IR35 insurance from Qdos Consulting |
What will IR35's successor look like?
Posted Aug 5, 2010
This article was kindly provided by Qdos Consulting.
One of the immediate tasks of the newly formed Office of Tax Simplification (OTS) will be to carry out a review of the IR35 legislation with the focus being on exploring alternatives to it. The OTS is to provide an initial report to the Chancellor by Budget 2011 that:
- Identifies and provides evidence of the complexity and uncertainty created by IR35. This should not be too difficult as it is in abundant supply!;
- Considers alternative legislative approaches that would be simpler and create certainty whilst ensuring that where personal service companies are used to disguise employment, then any income that is effectively employment income is taxed fairly; and
- Considers the scope for tax avoidance and the extent to which alternatives to IR35 would affect it.
- The Government are also interested in the structure of the tax system and the employment status test generally. This could mean that the tests for employment status and the boundaries between employment and self-employment may change.
So given this mandate, what will be the factors that influence an alternative to IR35? It is likely that the following considerations will help shape Osborne's omen:
- Reluctant employers who, due to recruitment constraints, prefer to engage freelancers rather than employ workers.
- Employers avoiding NICs by using freelancers rather than taking on employees.
- Ensuring that cavalier employers do not escape their obligations placed on them by employment law and PAYE.
- Contractors motivated to set up their own companies simply to avoid tax. IR35 was originally introduced to counter this perceived abuse.
- End clients dictating that self-employed contractors operate via personal service companies and by doing so transfer the PAYE/NIC burden to the freelancer.
- The genuine self-employed should not pay the same amount of tax as employees. This would be unfair given that those running bona fide businesses do not have the job security that employees enjoy.
On 27th July the Government published nine tax related documents for discussion and consultation so it is hoped that this trend will continue and that before any new IR35 replacement rules become legislation they will be offered up for consultation. There certainly won't be a shortage of volunteers wishing to add their suggestions!
All content ©Contract Eye Ltd. Protected by Copyscape. Please scroll down for related articles.
Contractor Services
- Professional Indemnity Insurance - Essential cover from Hiscox
- The fair umbrella company - take home more pay with paraplus
- InTouch Contractor Accounting - specialist online service & great advice
- Parasol - the UK's favourite umbrella company
- Contract Experts - ClearSky Accounting on 08000 325 326
- Helix Management Ltd - Up to 90% retention. Same day payments.
- Umbrella Company - 12,000 contractors can't be wrong!
- Together we're stronger! - Join PCG, representing contractors
- Cloud 9 Group - Umbrella Solutions only £27.50 per week
- Qdos - IR35 experts - Providers of low cost contractor insurance
- K & B Accountancy Group - Fixed fee contractor accounting only £75pm
- Free IR35 & Tax Review - Call ICS on 0800 195 3750
- Contractor Mortgages - the best deals, based on your contract rate alone!
Related Articles
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
