If you haven’t been living under the rock, you’ll agree that the world of contracting is experiencing bouts of tumult since a long time. There’s a high chance of a mass of contractors assessed to be inside IR35 as it now the responsibility of the fee payer (recruitment agencies or trusts) to determine whether or not a contractor is operating inside or outside IR35.
Contractors will also not be able to avail the 5% tax-free allowance – a development which took place during the Autumn Statement in November 2016. Since, Apprenticeship Levy will hit the fee payers, contractors will feel the ripple effect. Due to this development, contractors will now be given an ‘employee’ status from a taxation perspective by the recruitment agencies.
Newsflash: 85% of PSCs are set to quit public sector
In a recent development, half of limited company contractors plan to quit the public sector over the IR35 reforms that are set to take course from April 6. A survey of almost 2,000 contractors by Qdos, a taxpayer-funded body shows that 85 per cent will abandon their contract and move to the private sector – all within the next 1.5 months.
These new findings, however, are not in tandem with the claims that say that most PSCs will look for ways to increase their pay to cover the losses in earnings that the IR35 reforms will impose. However, Qdos explains that the decision to leave public sector was dependent on the contractors’ ‘outside IR35’ status not remaining.
Get ready for Budget 2017
In another news, Chancellor Philip Hammond will deliver the Budget for this year on 8 March. This is the last fiscal event of springtime as from next year onward, the Budget will held during the autumn season. This change has been made with a view to bring more certainty and stability and less frequent changes to the tax system, thereby saving businesses and people from falling into a state of frenzy.
Are you a limited company contractor confused about your future mode of working? Contact us to clear your doubts.