Anna’s Accountancy Alerts – Week 42 (18th – 24th January 2021)

Anna's Accountancy Alerts

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Paying Contractors Under IR35

Changes to the Off-payroll working rules (IR35) come into effect on 6 April 2021.

If you engage contractors who work through their own limited company or other intermediary, and you are a medium or large-sized non-public sector organisation then you need to take action to prepare.

If you supply contractors who work through their own limited company or other intermediary, and you are an employment agency, you need to understand the changes and may need to take action.

Find some guidance here:

Help and support for off-payroll working – GOV.UK (www.gov.uk)

Your contractors will also need to understand that the way they pay tax may change.

Changes to off-payroll working rules (IR35): factsheet for contractors (publishing.service.gov.uk)

Tax Avoidance: Don’t Get Caught Out

On 26 November 2020, HMRC launched the ‘Tax avoidance: don’t get caught out’ campaign targeted at contractors who may be approached by people or businesses marketing tax avoidance schemes, or who may be faced with a scheme under third party recommendations or by searching on the Internet.

Tax avoidance – don’t get caught out – Don’t get caught out by tax avoidance – learn what it is and how to spot it (campaign.gov.uk)

Tax avoidance involves bending the tax rules to try to gain a tax advantage that was never intended.

It usually involves contrived transactions that serve no purpose, other than to artificially reduce the amount of tax that someone has to pay.

HMRC wants to encourage contractors not to be tempted by tax avoidance schemes which promise higher take-home pay, as it may cost them more in the long run.

Tax avoidance schemes can create life changing tax debts for people who are tempted into them without understanding the risks they carry.

Stay Up-To-Date With Coronavirus & Brexit News

Coronavirus has affected us all. Whether you’re a sole trader, employer or employee. Stay up to date with the latest news – including government support, tax implications, and more.