In the maze of information that is the IR35 legislation, contractors may well wonder where to start and how to go about assessing the law and what it means for them in practice. To this end, I’ve checked out some of the main sources of information and advice available over the internet and reviewed them for you. Let me know what you think…
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I was really pleased to be invited to take part in an online forum hosted by The Guardian yesterday, which, as part of the careers section of its website, had brought together a panel of experts to answer readers’ questions on freelancing.
The focus was on the creative, media and PR industries but a lot of the questions, particularly the accounting type questions which I was brought in to address, had a similar theme to a lot of the queries we see on the main contractors forums every week and relate to day one of being a contractor; how do I set myself up and what is the best way to manage my finances, making sure I don’t fall foul of the tax man?
It’s clear from the discussions I see, and take part in, that there are a lot of very experienced contractors out there who have a very firm grasp of accountancy for their business. However, there are also a fair number of ‘bar room’ experts who don’t always offer the most accurate advice, or pass on second hand advice they’ve picked up ‘from a mate.’
As per the advice I would always give to any contractor looking to set up their own limited company, do your research, make best use of all the online guides, and its always best to talk to a professional, specialist contractor accountant.
You may think that good advice can be quite costly, but it won’t be as costly to your business as bad advice.
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The coalition government went live with its ‘Your freedom’ website this morning, to much fanfare and Deputy PM, Nick Clegg, doing the rounds of the BBC’s various breakfast broadcasts.
The purpose of the website is to give the British electorate the opportunity to feedback to government on which laws and legislations they would like to see changed or removed all together.
Some commentators and opposition politicians have approached the ‘Your freedom’ website with a great deal of cynicism but for those of us in the contracting world, in which IR35 has loomed large for over a decade, it could be the best chance yet of having IR35 abolished, or at the very least simplified with added clarity!
The PCG has been campaigning for some time now to have IR35 abolished, and it’s fair to say the results have been mixed. I’ve spoken about the legislation being a focus point of a lot of politicking during the last election and there has been conflicting messages about IR35’s future in the press in recent weeks.
What can’t be denied though is the fact that contractors would prefer to see IR35 abolished and replaced with much clearer and transparent legislation.
Well if that is what you want, I believe the Your Freedom website is the best opportunity yet for us as an industry to speak out and we should be mobilizing to do so!
The PCG currently has around 20,000 members. The FCSA, of which our sister company Parasol is a founding member, looks after the collective interests of over 50,000 contractors, and if encouraged to do so, that is a lot of voices calling for IR35 to be abolished, something that the government will be forced to pay attention to.
At the time of writing there are already of 10 separate threads on the Your Freedom website discussing the abolition or replacement of IR35, citing its debilitating effect on small business and enterprise and bemoaning the relatively small tax yield it has produced in return. We will be adding our voice to that list and encouraging the contractors, agencies and business groups we work with to do the same.
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Well the dust is settling on the new coalition Government’s Emergency Budget and having had some time to reflect on its impact on our clients, I’m feeling reasonably positive.
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Article First appeared on www.itcontractor.com on Monday, 7th June 2010
Eleven years on since its introduction, IR35 is still rarely out of the headlines and remains a huge bone of contention for contractors operating as a limited company and their service providers. The future of the legislation remains unclear, despite the new Government’s commitment to a review with the aim of simplifying the rules. However, Derek Kelly, managing director of ClearSky Accounting, warns the contracting world not to expect IR35 to be abolished but calls on the Government for clarification.
The ‘official agreement’ between the Conservatives and Lib Dems, published earlier this month, hinted at a number of business and personal tax policies, due to be confirmed in the Emergency Budget taking place on 22nd June. Our contractors are a savvy bunch, and on the whole, appreciate that the UK needs to address its massive budget deficit and this will involve more taxes; however, fairness and clarity will be key.
Comparing apples with pears – when comparing contractor accountants, make sure you are comparing like for like!
One of the things that constantly concern me about the contractor accountancy market is the lack of transparency by some service providers. This typically takes the form of a low headline monthly fee used to entice new business but which conveniently neglects to mention some of the expensive add-ons, joining/leaving fees and all the other additional costs that can sneak up on busy contractors who haven’t had the time to go through the small print in much detail.
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Dads in Downing Street: Does Our Coalition Government Give More Flexibility to Cameron and Clegg?
Out of an election where three fathers of pre-school-age children stood against each other, two of them have ended up sharing power. Â So has this election offered the dads in Downing Street more by way of benefits than expected?
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Notably Absent
While I welcome the start of a new era in Government, with a pledge from this new coalition to hasten its plans to cut the £163bn Budget deficit, I wonder what these recovery plans really mean to UK business in the wider sense and, more importantly, to the professional contractor. Â
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July 21st, 2010 by Derek_KellyLast Wednesday I saw an interesting programme on BBC 2 called ‘How to Beat Tough Times: Money Watch’. The programme discussed some key issues regarding the current economic climate and how the recovery is predicted to be worse than the recession itself and I thought it raised a few points that would be interesting for those looking to take the plunge and start their own business.
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