The budget is always an important day not only for contractors working through umbrella companies or limited companies, but for everyone throughout the UK. Amongst other announcements made by the chancellor, such as the personal tax allowance threshold increasing and the top 50p tax rate being cut, contractors were not forgotten with news regarding further clampdown on tax avoidance and tax evasion.
The news was welcomed by leading UK umbrella company Tarpon, who provide all of their contractors with an 'ultimate employment solution' that guarantees 100 per cent protection against any potential employment law and tax challenges.
The government have always been fighting to reduce the number of those avoiding the correct payment of income tax by setting up personal service companies, hence the implementation of IR35 tax legislation, introduced in 1999. IR35 was created to prevent tax avoidance by workers using personal service companies, otherwise known as intermediaries, thus resulting in reduced tax and national insurance contribution (NIC) liabilities.
As stated by the Chancellor, the Government will introduce a package of measures to tackle avoidance through the use of personal service companies and to make the IR35 legislation much easier to understand for those “genuinely in business”. These measures include:
Strengthening specialist compliance teams to tackle avoidance of employment income
Simplifying the way IR35 is administered
Subject to consultation, requiring 'office holders/controlling persons who are integral to the running of an organisation' to pay income tax and national insurance at source.
A spokesperson from UK umbrella company Tarpon comments:
“Regarding umbrella company contractors, this budget was good news. It's also very encouraging to see that the way IR35 is administered will be simplified, because we understand the current complexities involved when dealing with tax and HMRC compliance.”
“We are also very proud to be able to provide contractors and agencies with professional advice surrounding potential employment law and tax challenges, including IR35 and AWR.”
Contact our tax experts at www.tarpon-uk.com or by calling 0800 434 6402, to find out how the new changes introduced by the budget affect you.
Tarpon is an umbrella company specialising in contractor tax efficiency, enabling contractors to maximise their income and streamline their admin.
Discover what your take home pay will be with Tarpon by using our online contractor salary calculator. Or speak to one of our experts, by calling 0800 434 6402.
Tarpon UK Ltd.
Wigmore Park Centre,
tel: 0800 434 6402