You may have heard of this latest new initiative from HMRC sometimes referred to simply as MTD – here we look at what this is and how it will impact you and your business.
Those who work in the public sector will be only too well aware of the additional scrutiny on the use of freelancers and how they operate their tax affairs.
Over the last year, we have received calls from clients who have been asked to provide assurances about their IR35 status and tax affairs.
Our advice has been:
- Ensure your contracts are reviewed for IR35 – we would suggest this is carried out by independent expert providers rather than using the HMRC helpline and,
- Assuming this review concludes they are operating outside of IR35 – then using a mixture of salary and dividends for extracting funds out of a limited company remains a robust and effective mechanism for achieving tax efficiency.
What happened in the Autumn Statement 2016?
What is it all about?
This ruling by the Revenue attempts to capture tax lost whereby individuals have set themselves up as Limited Companies supplying services but in reality are performing a task for a client in a manner similar to being an employee.
The recent Autumn statement confirmed some major changes to the way that IR35 will be applied, in particular to the public sector.
Here we will remind you what IR35 is about, what is changing and why there is a fear that the new reforms will leave a critical skill shortage of contractors in this sector.