IR35 and contractor substitution: tribunal ruling reinforces its importance in employment status cases
The importance of contractor substitution as a defence against IR35 has been reinforced in a recent tribunal ruling against HMRC. In HMRC v Talentcore, HMRC contested that the specialist duty-free sales consultants supplied by agency Talentcore were employees and their payments were subject to income tax and National Insurance Contributions (NICs) under Pay As You Earn (PAYE). However, Talentcore’s freelance sales consultants not only regularly swapped shifts with each other without permission, but also sent substitutes in their place and paid them directly, all of which was expressly allowed in Talentcore’s terms of business. HMRC lost the case, confirming again that to help them stay outside IR35 contractors should ensure they have a right of substitution in their contracts. More…
Contractors can learn new marketing and business skills with PCG’s new webinars
Contracting skills support dominates the Special Webinar Series for Freelancers line-up for PCG’s National Freelancers Day. Topics include starting out in contracting, generating new business, overcoming challenges and avoiding common pitfalls, plus how to avoid becoming a contracting commodity. ContractorCalculator CEO Dave Chaplin, who is delivering a webinar on pitfalls to avoid on the way to a successful contracting career, says: “The National Freelancers Day Special Webinar Series offers contractors a unique opportunity to benefit from insights, tips and tools delivered by people with first-hand knowledge and expertise.” More…
Umbrella company contractors being encouraged to incorporate because of AWR
Umbrella company contractors are already being encouraged by recruiters and clients to incorporate to take them out of the scope of the Agency Workers Regulations (AWR). Since AWR came into force on 1 October 2011, ContractorCalculator’s Contractor Doctor has received numerous questions from concerned umbrella contractors unsure of their position. Although some umbrella contractors may be pleasantly surprised by the increase in take-home pay that incorporation can generate, many won’t be suited to trading via limited companies because their earnings are too low or they don’t want the responsibility. More…
Interim management contractors receive AWR guidance from the Interim Management Association
Interim management contractors concerned that AWR might apply to their assignments can use new guidance published by the Interim Management Association (IMA) to help confirm their status. According to the IMA, interims trading via limited companies or sole traderships and offering their services on a business-to-business basis are not the intended targets of the legislation and are out of scope. The guide also highlights Directgov guidance on employment status that interims can apply to demonstrate they are genuinely in business. More… [registration may be required]
SMEs, including contractor limited companies, are owed £33.6bn in late payments, says BACS
Overdue business payments owed to small to medium sized enterprises (SMEs), including contractor limited companies, are at an all time high of £33.6bn. Currently, 861,000 small suppliers are owed an average of £39,000. That’s according to financial services firm BACS, which says the worst offenders are large companies, who between them account for 48% of small business debt. When asked why they don’t pay their small suppliers on time, large businesses told BACS it is because the invoice is awaiting authorisation or being processed by accounts. More…
Contractors should continue to benefit from economic uncertainty
Contractors should continue to benefit from the economic uncertainty as client organisations choose low-risk contractors instead of permanent employees. The latest Gross Domestic Product (GDP) estimate by the Office for National Statistics shows the economy grew by a relatively healthy 0.5% in the third quarter of 2011, while the Markit/CIPs UK Construction and Services PMIs showed modest growth in October. Conversely, the Markit/CIPs UK Manufacturing PMI showed significant contraction and falling export orders in the manufacturing sector, while a National Institute of Economic and Social Research (NIESR) report forecasts the UK has a 50%-70% chance of falling into recession because of the Eurozone crisis. More…
Agency Workers Regulations: supermarket’s agencies put Swedish derogation into practice
Agencies supplying the supermarket Morrisons have used the Swedish derogation model to employ temporary workers directly, taking them outside of the Agency Workers Regulations (AWR). Sam Webb of just-food reports that Morrisons used the Swedish derogation, widely accepted as a loophole to evade AWR, to avoid paying temporary workers the same as permanent employees. More…
Contractors warned by HMRC not to submit paper tax returns for 2010-11 tax year
Now that the 31 October 2011 deadline has passed, contractors have been warned by HMRC that submitting paper Self Assessment tax returns for 2010-11 will lead to them being charged an automatic £100 penalty. There are further late-filing penalties after three, six and twelve months. To avoid these penalties, contractors must file their online Self Assessments by 31 January 2012 for the 2010-2011 financial year. More…
Contractors with overseas properties now being targeted by HMRC
Dave Chaplin is a former IT contractor in the City of London, and is founder and CEO of ContractorCalculator, and author of the Contractors' Handbook.
Started in 1999, ContractorCalculator (this site) is the leading independent website for the UK contracting industry – most of whom are highly skilled knowledge workers.
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Contractors with overseas property are being targeted from this month by a new 200-strong HMRC team of investigators and specialists. According to HMRC, it plans to apply “new and innovative risk assessment techniques”, including data mining of publicly available information, to target wealthy individuals, including contractors, who own land and property abroad. More…
Published: Friday, November 04, 2011
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