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Contractor News Round-up

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Contractor News Round-up

One in seven of people in the UK are self-employed, with hundreds of thousands of Brits working as contractors providing additional knowledge, value, and capacity to the businesses and organisations they work for.

Those of us operating as contractors through our own limited companies don’t get sick pay. We don’t get holiday pay, we don’t get parental leave, and we don’t have employment rights. In the past, we were compensated for that with a tax system that charged us less than full-time employees because we received less from the system than they did.

But there is now a creeping feeling that the attack on the off-payroll professional is going to intensify, and that life is only going to get harder and harder. That’s why we at the Financial Management Centre thought that now would be a good time to sit down and take stock of where we are in October 2018.

 

2019 loan charge

There are Early Day Motions about the 2019 Loan Charge in Parliament. There is even a nationwide support group for contractors affected by this, many of whom are in absolute despair and some of whom are suicidal.

The 2019 Loan Charge is an attempt by HMRC to reclaim tax and National Insurance (plus interest) it claims it should have received by contractors and others using Employee Benefit Trusts and similar vehicles to pay less tax. Up until 2017, all such schemes were legal – those who took part in the scheme submitted their self-assessments every year and HMRC never queried them.

A particularly draconian act of Parliament was passed which retrospectively declared all such schemes as illegal and allowed HMRC to delve into a contractor’s financial past – looking back over the last 20 years.

HMRC are now sending bills to contractors (including those who were hoodwinked into participation and those for whom it was part of their umbrella- or recruiter-employment contract), sometimes running up to £360,000 for taxes they would have paid had they not been in “disguised employment”.

If you have been approached by HMRC or you have taken part in any of these schemes in the past, please contact the Financial Management Centre so that we can propose a possible settlement package with HMRC on your behalf.

 

IR35 in the private sector

HMRC have determined that the changes to IR35 in the public sector have been a tremendous success since they was introduced in 2017. The only problem is that no-one has seen the evidence backing up their assertion that it was a success, despite the fact that many umbrella company contractors and limited company contractors say that they will no longer work on public sector contracts.

While we don’t know at the time of writing what’s going to be in the Budget, there is speculation that the changes made to IR35 public sector contracts will be extended to the private sector from either April 2019 or April 2020.

HMRC started a consultation about the proposed change in May 2018 but it looks like a paper exercise because recent pronouncements to the IR35 Working Group appear to suggest that this course of action is now inevitable and that it will not be stopped.

Keep an eye on the Financial Management Centre blog for more updates.

 

GDPR – four months on

The General Data Protection Regulation is a powerful new EU-wide law designed to protect the security and integrity of private individual’s sensitive data. That includes any data by which they can be identified.

There have been no major prosecutions so far since the law came in as the Information Commissioner’s Office seems reluctant to come down hard on those companies whose data security, collection, and distribution policies caused a breach or a leak.

There’s a great article on LinkedIn here about whether a contractor is considered as a data processor under GDPR written by John Thompson, managing partner in business intelligence & analytics at Client Solutions, which we think you should read.

                                                                                                             

England’s leading contractor accounting specialist

For support and advice on all matters of contractor taxation, IR35 and more, please call us on 0333 202 7198 or email info@tfmcentre.co.uk.