HMRC Gives IR35 Guidance
At last contractors have been pointed in the right direction after being left in the dark since the 2013 budget as brand new IR35 guidance is finally issued by HM Revenue and Customs. At the end of last year, the contractor based legislation targeting 'disguised employees' and tax avoidance was subjected to its first change in over a decade. Following this important news however, further clarity failed to be introduced, leaving many self-employed professionals oblivious to the new rules and regulations.
Finally, new IR35 related direction has been issued by the taxman, stating when the legislation's effects apply to the much discussed 'office holders'. Fulfilling its pledge given after the budget to publish further IR35 guidance 'shortly', the revenue have been busy producing clear definitions of these 'office holders' and also published what effects the changes to IR35 will bring.
Those who have a career in contracting, regardless of the sector or industry, should be well aware of Her Majesty's Revenue & Customs and the government's holding over the profession. After a hazy period of contracting during the 90's, where those working through their own companies were getting away with a restriction-free lower tax bracket, the revenue aimed to make any form of contractor related tax avoidance obsolete in the form of the IR35 legislation, attempting to have a watertight system of monitoring limited company duties.
It is a scary thought that thousands of tax paying company owners can have the rug pulled from under their feet at any given moment. Unlike stark PAYE tax evasion, the IR35 legislation and contractor tax avoidance is far more subtle and low key, with far less publicity created around this area of tax avoidance. As a result of this, there are still some who may be unaware that they are actually operating under IR35 and thus guilty of tax avoidance.
There are now a number of different ways in which contractors can monitor the activities of HMRC, from information outlets such as the IR35 forum to dedicated Twitter accounts which mean that the days of contractors being left in the dark are now over. Regarding any form of tax avoidance, if anyone suspects that they may be guilty of accidental evasion, anybody's best way of going about rectifying it would be to contact HMRC as soon as possible. Any interest or investigation from the tax office is usually made considerably more simple and straight forward with an existing history of communication. Even the simplest question or tweet to the taxman informing or querying their tax status holds weight whenever a situation arises, and any professional, contractor or otherwise is recommended to come clean of any potential unpaid taxes.
Contracting is a complicated line of work from a tax perspective, but keeping on top of your tax status and keeping an active communication with the office is highly advised. The taxman is so often seen as the enemy to tax paying professionals, but anyone who is anxious of their status may find that contacting the revenue will provide their greatest helping hand.
Finally, new IR35 related direction has been issued by the taxman, stating when the legislation's effects apply to the much discussed 'office holders'. Fulfilling its pledge given after the budget to publish further IR35 guidance 'shortly', the revenue have been busy producing clear definitions of these 'office holders' and also published what effects the changes to IR35 will bring.
Those who have a career in contracting, regardless of the sector or industry, should be well aware of Her Majesty's Revenue & Customs and the government's holding over the profession. After a hazy period of contracting during the 90's, where those working through their own companies were getting away with a restriction-free lower tax bracket, the revenue aimed to make any form of contractor related tax avoidance obsolete in the form of the IR35 legislation, attempting to have a watertight system of monitoring limited company duties.
It is a scary thought that thousands of tax paying company owners can have the rug pulled from under their feet at any given moment. Unlike stark PAYE tax evasion, the IR35 legislation and contractor tax avoidance is far more subtle and low key, with far less publicity created around this area of tax avoidance. As a result of this, there are still some who may be unaware that they are actually operating under IR35 and thus guilty of tax avoidance.
There are now a number of different ways in which contractors can monitor the activities of HMRC, from information outlets such as the IR35 forum to dedicated Twitter accounts which mean that the days of contractors being left in the dark are now over. Regarding any form of tax avoidance, if anyone suspects that they may be guilty of accidental evasion, anybody's best way of going about rectifying it would be to contact HMRC as soon as possible. Any interest or investigation from the tax office is usually made considerably more simple and straight forward with an existing history of communication. Even the simplest question or tweet to the taxman informing or querying their tax status holds weight whenever a situation arises, and any professional, contractor or otherwise is recommended to come clean of any potential unpaid taxes.
Contracting is a complicated line of work from a tax perspective, but keeping on top of your tax status and keeping an active communication with the office is highly advised. The taxman is so often seen as the enemy to tax paying professionals, but anyone who is anxious of their status may find that contacting the revenue will provide their greatest helping hand.
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