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HMRC has launched a consultation on a new offset mechanism which will be introduced into Off Payroll legislation in order to prevent double taxation.

This news has been very much welcomed, however, the Association of Professional Staffing Companies (APSCo) believes that more reform is needed.

Commenting on the move, Tania Bowers, Global Public Policy Director at APSCo, and member of the IR35 Forum said, “Following APSCo’s involvement with HMRC in the development of this proposal we welcome the confirmation that HMRC are consulting on introducing an offset mechanism into Off Payroll to prevent double taxation which unfairly impacts clients and recruitment firms.

“However, we remain firm in our belief that even with this offset, the rules as they are currently written are not fit for purpose in the modern world of work.

“Given the level of Off Payroll receipts reported by the OBR last month, it is highly likely that many genuinely self-employed professionals are being forced to work via payroll due to clients’ over cautious approach of assessing assignments as “inside IR35”.

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Tania added, “This particular challenge is likely to have far more impact on highly skilled over 50’s workers deciding to stay or leave the labour market than the pension changes announced in the Budget which, given the Chancellor’s commitment to encouraging this segment of the population back into employment, is counter-intuitive.

“Self-employment through a PSC is the type of flexible, well-paid work that is highly attractive to the skilled professional over 50’s labour force and is a route to market that APSCo knows can keep skilled workers motivated well into their 60’s.

“There needs to be clarity – written into law – around the definitions of employment and accommodations are required to support the highly skilled flexible labour market in a fair manner. As it is currently defined, Off Payroll legislation is, in our view, unsatisfactory.

“There is a lack of clarity around highly-skilled self-employment in particular, leading to recruitment firms having the uncomfortable role of being the deemed employer, whilst not being responsible for the employment status decision. We remain adamant that Off Payroll needs a reform – something that we hope will be factored in as a follow up to the offset mechanism.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.

Why Thousands of Contractors Choose Dolan Accountancy

With over 25 years experience in contractor accountancy helping thousands of contractors, freelancers and the self employed, Dolan Accountancy has the specialist skills, reputation and credibility you can trust.

Working closely with our sister company, Contractor Umbrella, it means we can offer one low cost, fixed fee package at £105 + VAT. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795 100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.

We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours
  • Free use of Contractor Umbrella – With IR35 Legislation changes we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, Contractor Umbrella
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams
  • Free Access to FreeAgent – We offer all of our clients access to FreeAgent, free of charge
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few
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