Helping you navigate Brexit, IR35 reform and the 2020/21 financial year
There are many advantages to engaging a contractor accountant – from saving you time and money to ensuring your tax efficiency and compliance. But let’s be honest – you know all of this already, don’t you? So let’s take a look at things from a different perspective.
In this article, we’ll explain why, as we venture further into 2020, hiring an accountant this year specifically may turn out to be one of the smartest moves you make as a freelancer or contractor.
Helping contractors navigate Brexit
Amazingly, even now, we’re unsure of the true impact of Brexit. Nonetheless, the UK has officially left the European Union. And while a transition period will remain in place until 1st January 2021, allowing for the free movement of goods and services for the rest of the year, things will likely change for contractors working in Europe in due course.
The UK will leave the Single Market and new rules for contractors engaged in the EU will be introduced. How this will affect currency rates, the strength of the pound, not to mention the availability of contracts in Europe remains to be seen. That said, accountants will have their ear to the ground, monitoring the situation closely. Contractor accountancies are well-placed to advise on whether taking on a contract abroad in 2020 and beyond is realistic and worth your while financially.
Assisting contractors with IR35 reform
Changes to the off-payroll working rules will be introduced on 6th April 2020. This reform will see contractors lose the right to determine their own IR35 status when working with medium and large private sector firms. These rules were enforced in the public sector in 2017 and apply to all organisations.
Contractors are worried they will have their IR35 status wrongly assessed by their clients, which could result in them being placed inside IR35. To combat this, at QAccounting, we provide expert IR35 contract reviews through our trusted partner Qdos Contractor. These can help safeguard your tax status and successfully challenge incorrect decisions made by your engager. For contractors legitimately placed inside the scope of the legislation, QAccounting has just launched an innovative and cheaper alternative to working via an umbrella company, which allows you to continue trading through your limited company.
Advising contractors on 2020/21 tax changes
In addition to the roll-out of IR35 changes, contractors often have questions about other reforms to the taxation system enforced at the start of most financial years. While the Conservatives made a raft of tax promises prior to the general election last December, most notably pledging in its party manifesto to “not raise the rate of income tax, VAT or National Insurance”, the Budget on 11th March may outline other future tax plans impacting contractors.
After the Budget has been revealed, don’t hesitate to pick up the phone to a specialist contractor accountant who will be able to guide you through any changes and explain how you can compliantly maximise your tax efficiency. Failing that, head to our News section for a full round-up of tax changes when they are announced.
2020 is unique in many ways, with Brexit uncertainty set to continue impacting business confidence, while much-anticipated private sector IR35 reform is due to arrive. A trusted contractor accountancy will help you successfully navigate these challenges and seize any opportunities they present.
With over 20 years’ experience in supporting contractors, QAccounting is one of the UK’s leading contractor accountants. Offering a range of trusted contractor accountancy services and IR35 solutions, we are proud of our 9/10 customer rating. To learn more about our flexible contracts, which start from just £90 p/m + VAT and to switch to QAccounting for free, please request a callback and one of the team will be in touch.
Further Economic Support
On Sunday 31st October 2020 the Government announced a number of updates to existing economic support measures. The full details of these measures are reported HERE (https://www.gov.uk/government/news/furlough-scheme-extended-and-further-economic-support-announced ).
Updates to the Job Support Scheme
The Government has published detailed information about the scheme HERE (https://www.gov.uk/government/publications/the-job-support-scheme/the-job-support-scheme )
Accounting for Limited Company Property Investments
It can be a complex decision for clients when it comes to determining how best to utilise existing Contractor Limited Company funds in a Property Investment Company