IR35

This legislation was brought in with effect from April 2000. Basically it attempts to cut off the advantages of a limited company which are mainly in saving National Insurance and to some extent personal tax. It says that if the limited company was ignored would the relationship between contractor and client be considered one of employment or self employment. If employment then the legislation applies. The tests for determining employment/self employment status have been built up through case law. Although it is possible to go through a list of these ticking them off as you go the Courts maintain that this is not the correct approach and we are left with a very subjective exercise in determining if the legislation applies. This provides difficulty for the contractor but still more difficulties for the Revenue. The Contractors Accountant Ltd can provide guidance on your position and how to minimise your chances of being subject to the legislation.

The Revenue has issued their guidance notes, which, if you would like further background, can be found on http://www.hmrc.gov.uk/ir35/ . This gives an outline of the law as they see it and is specious to say the least. Even so it should be possible for most IT contractors and other professionals to negotiate their contracts to fall outside of the scope of the legislation following their guidelines, let alone what the law says. Most agencies have contracts that can avoid IR35 if appropriate. We set out below our suggestions on the construction of contracts. Bear in mind that these suggestions are from a taxation point of view and if you are in any doubt about your contractual obligations you are advised to consult a solicitor. We can recommend a solicitor if required.

In short we aim to take the hassle out of running your company while keeping your tax low and we are approachable. Our approach is very much "leave your problems with us". A list of the work we do is shown later. This is not exhaustive so if it’s not on the list then please ask. The full service is provided for a very competitive fixed fee. If you are interested in our services please call us for a discussion and we explain how we work and see if this suits you or send us an email.

The Current Contractor

As an established contractor you may be finding the service from your accountant a little too traditional. Do these points ring true?

• Your affairs not kept up to date

• There is not enough quality time spent on your accounts and tax planning

• You are left to fend for yourself in critical areas

• You are uncomfortable discussing your affairs or even charged if you do

• Or are you just paying too much?

If so then why not ask us at The Contractors Accountant for a review. Just give us a call or send us an email to arrange an appointment or we can discuss your affairs without obligation. We will be happy to compare our service with your current arrangements.

The new contractor

You will probably have heard that a personal limited company is your most cost effective option as you embark on your contracting career. Who should you turn to? Why not ask us as specialists in this field? Please call and we can discuss your situation and evaluate the best options. Alternatively feel free to make an appointment to come and see us without obligation. We will cover the following:

• Is a limited company right for you?

• What are the other options?

• Work through the tax advantages for you

• Discuss any other of your concerns, e.g. pension and mortgage implications.

Once you are convinced that the limited company route is for you, we will go through what our package has to offer. It is then up to you. We can set a company up with your choice of name within 24 hours ready to trade. For contractors short of time setting up in business can be carried out by phone and email.

Our new company services include:

Setting Up The Company

• Limited company provided either set up with your choice of name, or off-the-shelf

• Our relationship with two leading banks means that we can arrange to open an account easily and to your requirements

• VAT registration arranged if required

Salaries And Dividends

• We will prepare payslips and dividends for you and all returns to HM Revenue & Customs - you just raise the cheques

• All annual returns prepared including details of your expenses where these are required

• Electronic filing of Employer HM Revenue & Customs returns to take advantage of the rebates offered.

Accounts

• We ask that you send us a list each month of what has been spent and received

• We write up your accounts and prepare the VAT return from this

• Annually we will draw up the year's accounts to send to Companies House and complete your Corporation Tax return

Company Administration

• We prepare the returns necessary for Companies House and draw up any resolutions and minutes required in the running of your company

Tax Planning

• We will regularly review your situation to see if there are any improvements that could be made

• We ask that you let us know if there are any changes in your circumstances or you wish to make an asset purchase through the company, e.g. car. We will advise you as to the best course

• Advice on IR35 and how this can be avoided