Umbrella company contractors, freelancers and other self employed workers might not be too happy when they read the recommendations of an influential think-tank regarding Britain’s taxation system.
The requirement for all employees to be enrolled automatically into a pension scheme is due to be implemented in 2012, but it seems there are still some aspects of the legislation that are causing concern.
Employers may be relieved to pass over employee tax calculations to HMRC but experts are not convinced that a centralised tax system will work efficiently in the UK.
Any contractors currently at work in the UK as either limited companies or sole traders may be interested in a new series of figures recently published by HM Revenue & Customs.
Due to recently discovered errors, HMRC has sent out its first round of approximately 45,000 letters to taxpayers, potentially including umbrella company contractors, informing them that their taxes were wrong. The total number of letters sent out should top 6 million by the end of this year.
A fresh warning has been issued about a telephone scam that could be targeting small business owners and umbrella company contractors.
Contractors could be better off as a result of George Osborne’s announcement that the income tax threshold will change. The REC said that temporary agency workers who only work for short periods will be especially delighted with the budget announcement.
Ten of thousands of people, including contractors and freelancers, have been affected by the tax coding problems caused when HMRC migrated their records to a new computer system earlier this year.
The Chartered Institute of Taxation has called on the new coalition to prioritise tax reform. They have written to George Osborne, the new chancellor, highlighted the need to simplify the current tax regime.
In my world, the term “self employed umbrella company” is a tad paradoxical. After all, a traditional PAYE umbrella employs their workers and provides (or should provide) the various benefits commensurate with employment.
During their spring conference at the weekend, the Liberal Democrats announced that they want to see the income tax threshold raised to £10,000.
The Tory party is looking at ways to change the way employees pay NICs and income tax contributions. At present employers deduct these contributions at source and forward the monies to HMRC.
