The UK’s IR35 tax rules, newly introduced, will become effective by April 2020. This article explains these new UK tax rules.
What Is The Present IR35 Tax Policies For UK Tax Payers?
The current IR35 tax rule addresses the issue of a tax avoidance by an independent contractor contracting via a personal service company (PSC) to provide the end user a service. On these grounds, IR35 is applicable if, by removing the PSC, the link between end user and the person providing the service becomes one of employer and employee.
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Thus, if IR35 is applicable then the PSC must;
- Deduct income tax as well as NIC’s from any payments received from the end user
- And, pay employer NIC’s to HMRC
Under this present status most PSC adapt the notion that IR35 is not applicable and enjoy more favourable tax commitments. The new rule plans to shift the responsibility of IR35 to the contractor/enduser. Then are the liabilities more? Are they eligible for UK tax refunds? As a leading tax refund agency in the UK, we can help you survive the new tax laws. Yes, they are complicated but there is always a way to make sure you only pay the taxman what’s due. Talk to us and let’s evaluate your case under the new IR35 tax laws.
How Is UK Tax Law Changing?
From April 2020 the new IR35 tax law will become effective. Thus, the responsibilities held by the PSC will make a shift to the end user. Will the end user then be burdened with a higher tax risk? It all depends on how the contactor providing the end user a service is deemed under the employer employee classification.
How Do I Deal With The New IR35 Laws?
End users have several options to choose from in the event their contractors are deemed employees. But to fully analyse your options and to choose the best path, talk to a tax consultant at Taxback; together we can make the new UK tax transitions for 2020 work in your favour.
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