Posted:11-May-2012
TaxAssist Accountants franchise advises new tax guidelines for consultants and contractors
National franchise TaxAssist Accountants is advising consultants and contractors across the country that clearer guidelines to determine their tax liabilities will be piloted from this month.
TaxAssist Accountants Communications Manager, Jo Nockels, said:
“There are millions of consultants and contractors across the UK, particularly in the education, healthcare, IT, clerical, engineering, legal, accountancy and construction sectors, who are genuinely self employed and have legitimately set up limited companies. But for a long time they have lived in fear of being caught by IR35 legislation because there has always been so much confusion about the rules.
“The IR35 rules were originally set up to prevent ‘disguised employment’ where an employee would typically set up a limited company and invoice their employer for their services via the limited company.
“In doing so, the employee could minimise tax and NIC liabilities by drawing a low salary and dividends from their limited company. The employer would have reduced liabilities in respect of NIC, statutory payments (such as sick pay) and holiday pay. The new guidelines aim to bring long-overdue clarity for people who carry out genuine freelance work and will be welcome news for many businesses.”
Online questions will be used to determine employment status, including:
- Do you have your own business premises?
- Do you need professional indemnity insurance?
- Can you increase your income by working more efficiently?
- Do you employ people?
- Would you have to correct any mistakes on a project at your own expense?
- Do you have a separate bank account for business cashflow and expenses?
TaxAssist Accountants is the largest national network of independent accountants working specifically for small business and has nearly 200 franchisees across the UK.
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