Loughran Murphy Accountants in Wilmslow

Register with HMRC to set up your online personal account and obtain yout UTR (Unique Tax Reference) Number.

Once you have your UTR number we can register online to act as your accountants.

HMRC will send you a code number to comfirm that you want us to act for you. 

Please advise us of the code number and then we will take care of everything else.

Click here to register with HMRC  thumb arrow 6 right    

We discuss IR35 with all potential new clients, especially one person companies.
We provide help and assistance to any clients wishing to declare to HMRC that IR35 applys to them.
If you find that your circumstances have changed and that IR35 does now apply to your business then please instruct us to advise HMRC accordingly.
A series of tests to gauge the status of workers was released by HM Revenue & Customs in May 2012.
The IR35 legislation is designed to prevent people who use intermediary companies to sell their services from being better off than if their clients employed them directly.
The clarifications come in the wake of recent controversy surrounding the status of 2,000 senior public sector staff who were employed in this manner. HMRC has released 12 tests with illustrative scenarios with the aim of helping to determine the status of workers, and therefore whether IR35 applies.
HMRC emphasises these tests are "not set in stone".The tests are:

Assistance: Does your business engage any workers who bring in at least 25% of your yearly turnover? (Score 35 points if 'yes')
Actual substitution: Have you hired anyone in the last 24 months to do the work you have taken on? (Score 20 points if 'yes')
Business premises: Does your business own or rent business premises which are separate both from your home and from the end client's premises? (Score 10 points if 'yes')
Efficiency: Has your business had the opportunity in the last 24 months to increase your business income by working more efficiently? (Score 10 points if 'yes')
Client risk: Has your business been unable to recover payment for work done in the last 24 months and/or more than 10% of yearly turnover? (Score 10 points if 'yes')
Repair at own expense: Would your business have to bear the cost of having to put right any mistakes? (Score 4 points if 'yes')
Advertising: Has your business spent over £1,200 on advertising in the last 12 months? (Score 2 points if 'yes')
Professional indemnity insurance: Do you need professional indemnity insurance? (Score 2 points if 'yes')
Billing: Do you invoice for work carried out before being paid and negotiate payment terms? (Score 2 points if 'yes')
Right of substitution: Does your business have the right to send a substitute? (Score 2 points if 'yes')
Business plan: This test has two parts. Firstly, does your business have a business plan with a cash flow forecast which you update regularly? Secondly, does your business have a business bank account, identified as such by the bank, which is separate from your personal account? (Score 1 point if 'yes')
Previous PAYE: Has the current end client engaged you on PAYE employment terms within the 12 months which ended on the last 31 March or with no major changes to your working arrangements? (Score MINUS 15 points if 'yes')

To see the document in full, visit: http://www.hmrc.gov.uk/ir35/guidance.pdf

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

AFTER a rather withering report from the Lords on IR35, followed by calls for its abolition, it seems fair to assume those at the top of HM Revenue & Customs would not define the issues around this particular piece of legislation as the department's most edifying episode.
Indeed, for a rule designed to prevent people from lowering their tax bill by not being directly employed, the numbers and criticisms levelled against it are far from impressive.
There were 256 cases examined in 2012/13, compared to just 59 investigations into IR35 in the previous year, according to Bloomsbury Professional.
HMRC was heavily criticised at the time for the low number of investigations it had launched, but its response has seen revenues grow from £200,000 to £1.1m.
While that rise is huge proportionally, it's still - even to the untrained eye - meagre. It should be pointed out the taxman estimates the rule's deterrent effect safeguards closer to £550m, but the Lords found there was "no basis" to the claim.
But while the Lords suggested in their report that HMRC should "do more to justify the existence" of the rule, it did not call for an outright abolition - as contractors', freelancers' and independent professionals' group PCG did.
There is a good reason for that, and it is simply this: what is the alternative?
How can we guarantee a quality piece of legislation can be drawn up, enacted and enforced better than the existing one? The process by which fundamental change in the LLPs' sphere has gone through, for example, would suggest such an end is far from assured.
There is, of course, a degree of public interest following public and political anger when it was revealed 2,000 senior office holders of public bodies were revealed to be receiving payment off-payroll, while the BBC revealed in September 2013 that 148 of its 467 presenters were engaged in the same fashion.
But much of that comes from lack of enforcement, so why not enforce it better?
 
Accountancy Age 8th April 2014.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

STAKEHOLDERS have called for the suspension of IR35, following a highly critical House of Lords report stating HM Revenue & Customs must do more justify the law's continued existence.
The legislation, designed to prevent people from lowering their tax bill by not being directly employed, has been the source of various controversies in recent years.
A membership organisation for contractors, freelancers and independent professionals, said a suspension with a view to abolish the rule would be desirable. HMRC has "failed to demonstrate that they have a sound basis for the £550m of tax and national insurance IR35 saves through acting as a deterrent", the body said, in line with the House of Lords. "This is despite the fact that the claimed deterrent nature of the IR35 legislation is its main rationale".
Last month, it emerged the number of IR35 investigations undertaken by HM Revenue & Customs grew fourfold in 2012/13.
There was public and political anger after it was revealed 2,000 senior office holders of public bodies were revealed to be receiving payment off-payroll, while the BBC revealed in September 2012 that 148 of its 467 presenters were engaged in the same fashion.
There were 256 cases in 2012/13, compared to just 59 investigations into IR35 in the previous year, according to Bloomsbury Professional.
HMRC was heavily criticised at the time for the low number of investigations it had launched, but its response has seen revenues from its IR35 activity grow from £200,000 to £1.1m.
Baroness Noakes, who led the investigation, said: "We found that there is a general lack of information of how widespread the use of personal service companies is in the UK economy and that this is due, in no small part, to the absence of reliable information collected by HMRC. This could be rectified by amending the personal tax return and employer year end declaration and making the questions on service companies compulsory, rather than optional."
Professional Contractors Group said: "We are calling for IR35 to be suspended while proper consideration is given to its abolition. Removing this unnecessary legislation will allow the UK's flexible workforce to do what they do best - boost British business. The government has refused to listen to the cries for help from the hundreds of thousands of contractors, freelancers and independent professionals blighted by IR35, but they cannot ignore the findings of the committee."
An HMRC spokesman said: "Many personal service companies are used for genuine commercial purposes, supporting labour market flexibility, but the report also recognises that some are used for tax and national insurance avoidance, underscoring the continued importance of the IR35 rules.

"We will continue to work closely with stakeholders such as the IR35 Forum, to make the rules easier to operate in the interests of the majority of taxpayers who play by the rules."

Accountancy Age 7th April 2014.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

THE NUMBER of IR35 investigations undertaken by HM Revenue & Customs grew fourfold in 2012/13.
The legislation, designed to prevent people from lowering their tax bill by not being directly employed, has been the source of various controversies in recent years.
There was public and political anger after it was revealed 2,000 senior office holders of public bodies were revealed to be receiving payment off-payroll, while the BBC revealed in September 2012 that 148 of its 467 presenters were engaged in the same fashion.
There were 256 cases in 2012/13, compared to just 59 investigations into IR35 in the previous year, according to Bloomsbury Professional.
HMRC was heavily criticised at the time for the low number of investigations it had launched, but its response has seen revenues from its IR35 activity grow from £200,000 to £1.1m.
Bloomsbury Professional said: "HMRC's attitude towards IR35 hardened following a small number of high profile tax evasion cases in 2012 involving senior executives in the public sector and BBC.
However, this legislation affects everyone working on a contract basis, and it's very complicated, meaning some honest freelancers are falling foul of the rules."
A spokesman for HMRC added: HMRC works hard to ensure people pay the right amount of tax at the right time, and that there is a level playing field for all.
"Since April 2012 we have strengthened our specialist teams who enquire into IR35 cases, changing the questions we ask at the start of an enquiry to establish the facts faster, and close enquiries where the contractors are no risk sooner.
"Whether IR35 applies is always based on the facts of the case. HMRC looks behind the contracts and considers the reality of the arrangements to establish whether a relationship is one of employment. To provide greater certainty to contractors we have improved guidance helping contractors to self-assess their risk of an IR35 enquiry."

Accountancy Age 26th March 2014.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

A SCHISM OVER THE OPERATION of IR35 emerged during a House of Lords Personal Service Companies Committee hearing.
The legislation, designed to prevent people engaged through personal service companies (PSCs) from taking home more money than they would if they were directly employed, has been the source of various controversies in recent years.
There was public and political anger after it was revealed 2,000 senior office holders of public bodies were revealed to be receiving payment off-payroll, while the BBC revealed in September that 148 of its 467 presenters were engaged in the same fashion.
The committee, chaired by Baroness Noakes, heard the rule is "unwieldy" and "incredibly tough to comply with".
"Our members always have problems understanding IR35," the Federation of Small Businesses'  said. "IR35 is a sledgehammer to crack a nut and you only get around it by spending money”. 
However, Accountants  claimed the legislation is adequate, instead calling for greater education and enforcement of the rule.
"Nobody's come up with a better answer. I would leave it alone".
HM Revenue & Customs ought to be braver in flagging up good practice and poor practice in IR35 matters. He said that the taxman may harbour an "understandable concern" over creating a competitive advantage or disadvantage to organisations.
"The consequence is they never quite condemn the bad stuff openly and publicly".

Accountancy Age 17th December 2013.

 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

THE TAXMAN has released a consultation document, setting out plans to compel senior members of organisations to be paid on-staff, rather than engaged through personal service companies, potentially allowing them to save on tax and national insurance contributions.
The move comes after controversy when 2,000 senior office holders of public bodies were revealed to be receiving payment off-payroll, while there have been calls for the BBC to make similar disclosures.
Yesterday, secretary of state for the Treasury,  told ministers "dozens" of public sector workers were paid in this way for more than ten years, and while he could reveal their job titles and lengths of contract, he could not name them.
The consultation document attempts to tie up the loopholes in the existing IR35 legislation, designed to prevent people engaged through personal service companies (PSCs) from taking home more money than they would if they were directly employed.
It does this by proposing legislation provisions which would "require the engaging organisation to place all controlling persons on the payroll... even where they might be working through a PSC for other purposes".
That would mean that the money paid by the engager to the PSC would be treated as if it were remuneration of an employee, allowing national insurance and income tax to be deducted at source by the engaging organisation.
A leading accountant, said the measures could have more far-reaching effects than necessary, and branded it "surplus to requirements".
 "The essential problem that the authorities are trying to fix is that of government departments engaging senior ‘controlling persons' via PSCs. They are attempting to address this by changing the rules for all employers – not just government departments.
"The knock-on effect of this for many private sector employers is that it could become more complicated, more expensive and more difficult for them to obtain the services of the people they need when they need them.
"There are concerns about wider tax leakage from the general use of PSCs but these are already being addressed via changes already under way to the IR35 regime."

Accountancy Age 25th May 2012.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

THE SERIES OF TESTS and scenarios released by HM Revenue & Customs "fails to take into account key elements of advice" provided by small business representatives invited by the Treasury forum to discuss the issue.
HMRC "had missed an opportunity to bring clarity, transparency and fairness in dealing with IR35", stated the group, which included the PCG, Recruitment and Employment Confederation (REC), Freelancer & Contractor Services Association (FCSA), Federation of Small Business (FSB) and Association of Professional Staffing Companies (ASPCo).
They expressed "concern that the measures suggested in the HMRC report will not go far enough and will not reflect the new approach promised by the government at the 2011 Budget".
Leading accountants, were also scathing of the guidance and felt the tests and scoring system provided were unsound.
"The weightings given to each test at the moment are flawed", he said.
"For example, meeting the 25% ‘assistance [income from employees] test' alone will mean that HMRC regards your company as low risk. However, if you only generate 24% of income from such employees you might automatically be at high risk.
He added that far greater efforts were needed to address abuse of the IR35 system; suggesting publishing such guidelines was not enough.
"Regardless of the scoring, unless HMRC puts considerable resources behind the three new teams that are due to be created to focus on IR35 issues or introduces sophisticated information gathering systems, publishing its risk analysis techniques serves no purpose."
The IR35 guidelines comprise 12 tests designed to help gauge the status of workers, with illustrative scenarios provided.

Accountancy Age 10th May 2012.

Disclaimer

Whilst we believe that the information displayed in this Website is correct at the time of publication, professional advice should always be obtained before acting on any information contained in this website. We cannot accept any responsibility for loss occasioned to any person as a result of action taken or refrained from being taken in consequence of the contents of this site. You must not rely on the information on the Website and you acknowledge that you must take appropriate steps to verify this information before acting on it. You are also responsible for ensuring that all persons who access the Website through your internet connection are aware of these terms and conditions, and that they comply with them.

Contact Details

Suite A,
65A Alderley Rd,
Wilmslow,
Cheshire, SK9 1NZ

email us : click contact us at the foot of the page

Telephone:-   01625 - 521666