RLKAccountancy
Call: 07824 159718
Email: [email protected]
www.rlkaccountancy.co.uk
Chartered Management Accountants, ACMA, CGMA
Make it count
Your quarterly newsletter from RLK Accountancy
Welcome!
Spring 2018
INSIDE
CONTRACTOR OR EMPLOYEE?
It’s a great time to think about the year ahead,
as 6 April 2018 marks the beginning of a new
tax year. Understand the rules of IR35 tax legislation
In this issue we give you everything you need to
think about to transform your planning into a
tax-efficient, profit-maximising future (page 2).
Will you be affected by the fall in the tax-free
dividend allowance? Review your strategy as the allowance
changes now
For those of you looking to invest in assets,
turn to our guide to the Annual Investment
Allowance on page 3, where residential landlords
will also find advice on tackling the spring refurbishment.
DIVIDENDS VERSUS SALARY
YOUR ESSENTIAL FORECAST
Plan now for a high-profit future
LOOKING TO INVEST?
If you’re thinking of buying a new car, take a look at the different options for business
owners on page 4. And whatever your plans, take five minutes to complete the self-
audit checklist for your business. Review the Annual Investment Allowance
As always, we’re here for advice on your specific circumstances.
Rachel Kowalski Check the best options for your next car
NEW WHEELS
Freelance or employed?
Be very clear on your employment status
as mistakes could be costly
If you are a contractor or freelancer, you are
probably familiar with the IR35 tax legislation. IR35
sets out to target tax avoidance by contractors
who should be employees. The intermediaries’
legislation ensures that individuals do not use a
corporate structure (eg a limited company) to
reduce the tax and National Insurance (NI) bill that
they would pay as standard UK employees.
Before the high-profile case of a BBC presenter
taken to tribunal in February 2018, there hadn’t
been any intermediaries’ legislation cases at
tribunal with HMRC since 2011. In this case,
Christa Ackroyd Media (CAM) Ltd was seen to be
an intermediary for Christa Ackroyd, the individual.
In HMRC’s view, Christa Ackroyd should have
been an employee as opposed to freelance,
and therefore had underpaid income tax and NI
amounting to more than £400,000. This was
due to the nature of the two long fixed–term
contracts and the working relationships between
the BBC and CAM Ltd.
BBC client
In 2017, public sector companies were asked
to take over the responsibility for determining an
individual’s status for tax purposes – employee
or self-employed. However, individuals are still
responsible for this determination in the private
sector. Employment status is not a matter of
choice; it is always dictated by the facts.
So, what should you be looking out for as a
limited company contractor to check that you fall
outside of IR35? If you answer yes to most of the
following, you could be a disguised employee:
• Are you responsible for doing the work yourself?
• Can an individual in the ‘client’ organisation tell
you what to do, when to do it and how to do it?
• Do you have to work fixed hours?
• Can you be told to move onto a different task?
• Do you receive overtime or bonuses?
• Are you treated the same as your client’s
employees?
• Do you only have one client?
If you are inside IR35, you can still work through
your limited company by paying yourself through
PAYE.
If you are still unsure, please feel free to contact
us or have a look at HMRC’s employment status
indicator tool: https://www.tax.service.gov.uk/
check-employment-status-for-tax/setup
CAM LTD intermediary personal service company
Ms Ackroyd worker