HMRC have released new guidance on IR35 and, although nothing game-changing has been added, it brings to light the importance of ensuring compliant working practices. Amongst other topics, the guidance reinforces the importance of verifying your status and emphasises the damning consequences of ignoring the legislation.
“Penalties are more severe if it can be proved that you’ve knowingly ignored the legislation.”
Most contractors operating through an intermediary (i.e. their own limited company) will at least be loosely aware of the implications of IR35. If found to be ‘caught’ by the legislation, a contractor would be liable for unpaid tax and NI, plus the potential for severe penalties. In the new guidance published this week the consequences of IR35 are highlighted, with the Revenue hammering home the point that if a contractor was to neglect to ascertain their position, it will not go unpunished.
In a paragraph entitled ‘The consequences of IR35’, the Revenue state:
“There can be significant consequences of ignoring the IR35 legislation. Interest and penalties may be charged on any late payment of tax and NICs due or as a result of an HMRC enquiry into your situation.
It’s your duty, as a director of your limited company or member of a partnership to ensure compliance with all relevant legislation and take responsibility for determining whether IR35 is relevant to your business or not.
If you fall within IR35 and don’t apply the legislation, there’s significant risk that HMRC will discover this during an enquiry.”
HMRC also go on to reiterate the importance of ensuring all retrospective contracts are compliant, stating that if IR35 has applied in the past but hadn’t been operated, then in order to prevent further fines the contractor should make a full disclosure to HMRC. It goes on to point out that if IR35 applied to previous contracts that were worked on but the company didn’t operate IR35, then it is the duty of the contractor to disclose this immediately.
The recently published guidance reiterates the need to tackle IR35 head on as a limited company director, highlighting the responsibility that all contractors have to ensure that they are working compliantly, and that they are not putting themselves at risk of IR35.
Cash flow management revolves around regulating the funds entering and leaving your business. This supervision allows you to maintain a healthy balance, ensuring your business can cover its operational costs and future investments. As a self-employed business owner, mastering cash flow management is critical for your venture’s longevity and profitability.
The success of property investment can hinge on many factors, and one that often gets overlooked is the crucial role of accurate property accounting. Missteps in this area can lead to serious financial and legal implications. This blog post explores common property accounting errors that property investors make and offers practical advice on how to prevent them.
Financial health checks for property investments are integral. Like any financial endeavour, property investments require meticulous management for fruitful returns. A core aspect of this management is these regular checks. This blog delves into the significance of such assessments and how they can bolster your property investment success.