Contractors relieved by details of leaked proposal
The Autumn Statement may not usually be the kind of event that attracts eager anticipation, but this year’s has been the subject of significant speculation, rumour mongering and interest from a number of different quarters. Amongst that speculation was the controversial prediction that contractors working through personal service companies would have to be put on a client’s payroll if they worked for them for more than a month.
This rumour sparked outrage and concern amongst those who would be affected, many of whom will be relieved to learn that there has been some clarification of the plans which has been confirmed by a ‘high level’ source at the Treasury. This has taken the form of an online test which will exempt any contractor from being considered an employee by ascertaining the level of supervision, direction and control that is in play in any given situation.
This will come as a relief to those who were concerned that the move to payroll would be automatic, and does suggest that there has been some consideration given to the fact that many contractors will frequently work for clients for a month or more. Whether the responsibility ultimately lies with the client or the intermediary has yet to be confirmed, but HM Revenue and Customs are reportedly working on a digital online service which will enable those who want to ascertain their IR35 status to confirm whether or not the legislation applies to them.
Commentators believe that the changes set to be announced in the Autumn Statement are paving the way for a shift in the way PSCs operate, with the ultimate position being that those who operate such businesses will have to prove that they have the right to operate outside of the IR35 legislation.
Although the details of the change need further clarification, contractors across the UK will be relieved to learn that the rules will not be applied in the blanket manner that was originally rumoured, and that the government will be developing a system which will allow them to ascertain the status of individuals who might be affected by the new reforms.
If you are a contractor and want to know more about the rules concerning the use of PSCs, then our guide to IR35 will help you to understand how the legislation works. We also have a take home pay calculator which will give you an idea of how much you could be earning and a guide to expenses so that you can keep track of your outgoings as well as your income.
For advice on any financial decisions as well as support when it comes to planning for the future, our specialist accountants are always on hand to offer the benefit of their expertise, so call today on 01442 275789 or email firstname.lastname@example.org for details of our specially designed packages.