What should you choose to be an Umbrella or a limited company?

For freelance contractors working to make a name for themselves in the UK’s dynamic and lucrative “gig” industry, a number of questions regarding tax status emerge relatively earn on the path down the road to sustainable self employment. Given the stringent regulation which accompanies tax law for freelance contractors, it is absolutely essential that contract workers fully understand the options available to them when filing for a tax status with the HMRC. Two of the most commonly adopted labels used to manage income / tax reporting are the umbrella company and the limited company. We’ve decided to devote this article

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What is the future of IR35?

Following the abrupt cessation of talks regarding the hotly anticipated IR35 legislation, a number of organisations, as well as a myriad of industry experts and political commentators, have begun to share their opinions on what the future of this controversial legislation may become. For those who have yet to hear of IR35, this particularly initiative was primarily designed to more closely regulate earned income reporting by freelance contractors and, ultimately, reign in their business practices in order to ensure that they can be considered salaried employees as much of the time as possible. The government’s reasons for defending IR35 are

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What is going to happen to IR35?

Contractors across the UK are breathing a deep sigh of relief following the cessation of talks regarding the widely controversial IR35, a planned legislative action which would have proven to be a substantial burden for independent contractors across a wide array of industries working within the UK. That being said, industry experts have begun to caution contractors that their reprieve may only be temporary, as it seems quite implausible that the government would simply choose to cease discussion of IR35 and the relevant tax issues related to contractor employment in the UK entirely. Given the fact that budget shortfalls have

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Improved pay for IT Contractors

As the number of skilled IT professionals continues to rise across the United Kingdom, industry analysts have noted a marked increase in compensation for IT contractors. According to recent statistics, pay rates for IT professionals have increased, on average, by 3.3%. This pay increase may, however, be somewhat tempered by a slight dip in demand for contractors. Certain positions within the IT industry, including Senior IT Management and Application Analyst, have experienced marked increases in compensation, with percentage raises of over nearly 10%. Of all positions studies, only software engineers and web developers have been found to earn less per

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Contractors delight as Osbourne backs down over payroll plans

In what is likely to be a hugely optimistic move for today’s current generation of contractors as well as the future of the industry at large, Osbourne has backed down over proposed plans to place Personal Service Companies on payroll. Although this much-feared move has been withdrawn, the Chancellor has continued to voice his disapproval over the current state of contractor status in the UK, claiming that tax relief for travel and subsistence expenses will now be regulated under a series of stringent restrictions. Although the lack of an announcement regarding the controversial PSC plan has helped assuage fears that

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Cap on contracting would be bad for economy

One of the most recent controversial legislative ploys designed to regulate the contract marketplace in the UK involves proposed policies which would transition contractors from into PAYE status if they spend more than one month with a single client. Largely designed to reap the maximum tax earnings from highly-compensated freelancers, this legislation has been met with fierce rebukes from the contractor community, largely due to the fact that it appears woefully out of touch with the current nature of the contracting industry and the methods by which contractors engage in professional activities with short-term employers. Government officials have claimed that

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Contractor Employment Rises in Scotland

According to a recent study, the number of freelancers and contractors working in Scotland has risen again for the eighth consecutive month. While this is a positive sign that the market for freelancers remains healthy, it is also quite encouraging to note that the measured rate of demand for freelancers has also remained unshaken. In fact, many experts are now claiming that the stable demand for freelancers in Scotland and the continued growth of the freelance industry are positive signs that the future looks bright for contract labour in the country.   It is also important to note that pay

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Do UK Contractors want to stay in the EU?

In a recent survey, a majority of freelancers and contractors residing in the UK stated that they would prefer it if the United Kingdom remained within the European Union. After the votes were tallied, more than 60% of respondents voted in favour of retaining EU membership status. Roughly 25% of those surveyed stated they would prefer it if the UK left the EU, while 14% claimed they were undecided on the issue.   The current surveys have yet to reflect the results of Cameron’s pending economic reforms which he has stated will be initiated in the near future. Of those

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Should contractors mind the tax gap?

In recent news, it has been announced that the annual tax gap is set to be published within a matter days. The tax gap, a document which reports the calculated “gap” between the amount of tax that should be collected and the amount that actually is, is published annually by the HMRC.   Although some consider the “tax gap” to be a simply statistic that has little to no repercussions on workers in the UK, others are not so sure. Those who believe that the tax gap has more deeper reaching implications than existing as a simple data point claim

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How Osbourne can help contractors

Given the complexity of the UK’s current tax system, a growing number of experts and authorities are calling for measures to be taken by Osborne in order to simplify legislation so that freelancers and contractors can effectively regulate themselves with regards to tax reporting.   One of the most pressing issues for a number of freelance consultancies recently is reduced rates resulting in higher costs and, subsequently, diminished take-home pay. All too often freelancers and contractors are being relegated to the status of “cheap labor”. This designation is more than syntactical. Given the fact that small businesses are being shouldered

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