HMRC looks set to bring in new tax rules for private sector contractors, says Swindon-based Optimum Professional Services.
The tax rules have already been introduced for contractors working in the public sector, and have netted £410m in income tax and national insurance contributions since they came into force in April last year.
Now the tax team at Optimum, which offers accountancy and legal services for businesses and individuals, believes HMRC has the evidence it needs to push through the changes in the private sector.
“The rules, known as IR35, were introduced in the public sector as part of the government’s crackdown on tax avoidance,” said Optimum CEO Richard Mathews. “IR35 is designed to combat tax avoidance by workers supplying their services via an intermediary, such as a limited company, but who would be an employee if the intermediary was not used. Such workers are called ‘disguised employees.’
“This level of recovery of tax and national insurance contributions is likely to harden the government’s resolve to impose the same reforms on the private sector. All contractors and consultants working through their own personal service company should be aware changes appear inevitable.”
Optimum’s CEO Richard Mathews
Speculation is rising that the reforms will be introduced in April next year, following an announcement in the November Budget.
Richard added: “At present April 2019 is being touted as the date for roll out to the private sector, but even if that is delayed the changeover seems only a matter of time.”
The tax team at Optimum works extensively with contractors and consultants and is offering a free initial consultation for anybody concerned.
For more information, call 01793 538 198, email email@example.com or visit www.optps.co.uk