As the general election dominates the news, the parties are competing for votes with ever more promises and pledges. In a month that has seen the release of all the parties’ manifestos as well as updates on some of the most pressing issues of the day, there has been plenty for contractors to keep track of.

Continuing IR35 controversy

Despite pledges to simplify and clarify the legislation which has had contractors constantly confused since it was introduced, HM Revenue and Customs has failed to impress with their attempts to make things clearer for those who are attempting to navigate the updated rules. Although HMRC promised to speed up the average length of an IR35 enquiry, there have been complaints that the department are refusing to accept evidence from contractors about their employment status.SJD Accountancy - IR35

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HMRC thinking the worst of taxpayers

The process of completing one’s annual self assessment tax return is rarely one that people relish, but knowing that any slight mistake will be assumed to be deliberate can make it even more daunting. The latest figures suggest that the department is issuing more fines for deliberate non-compliance than ever before, with the number of penalties nearly trebling between 2012-13 and 2013-14. The tax man insists that they evaluate each case on its merits, but the only way to avoid a fine is to ensure that your tax return is completed correctly.

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The budget is out, the main parties are preparing for the election, yet still the world of finance and employment keeps turning with a raft of changes, updates and some unpopular decisions to be made about a range of subjects. These have included:

Contractors bringing IR35 cases to tribunal

SJD Accountancy - beginners guideIR35 has plenty of critics, but the news that some of the freelancers who are currently disputing their status will be taking their cases to tribunal is encouraging to those who want some clarity on the major issues. Taking this kind of case to tribunal means that the details will be made public and many bodies that represent freelancers are hoping that the rulings will clear up much of the confusion surrounding the application of the legislation.

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Offshore tax evasion measures under fire

The Chartered Institute of Taxation has criticised the government’s latest plans to cut down on offshore tax evasion. The measures include a ‘strict liability’ clause which is designed to ensure that those using dubious means to reduce their tax bills can be penalised to the full extent of the law. The CIOT is unenthusiastic, however, because the proposals mean that someone could be handed a prison sentence without there being any requirement to prove intent on the part of the culprit. The CIOT are working with HMRC to help improve the terms of the legislation to help them focus on intentional evasion.

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The news for contractors has been mostly positive over the second half of March, although for many the Budget threw up as many questions as it answered. A number of specific issues have been addressed by parliament in the run-up to the election though so there are some signs that self employment is becoming more of a hot topic for politicians.

The Bank of England proved unlikely allies when they released a report which confirmed what most contractors and independent professionals already knew: that those choosing to work for themselves were doing so because it appealed to them and suited their lifestyles. Just as experts were criticising Ed Milliband for his negative view of self employment, the Bank of England’s report supported the view that self employment was a legitimate choice for most of the independent workforce. Far from being an unwelcome necessity, self employment offered much sought-after flexibility and more choice over their career paths, according to the report, which made Labour’s approach to self employment even more unfathomable.

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Interim managers looking for work could find their prospects looking up, with an Ipsos MORI survey showing an increase in demand towards the end of 2014. The number of enquiries about positions rose significantly between the final quarter of 2013 and 2014, and the number of new assignments available also rose by 5 per cent over the same period. Billable hours were up as well, both between 2013 and 2014, and between the third and fourth quarter of 2014. Most of these opportunities were in the private sector with a large majority coming from the finance industry and this continued a trend from the final quarter of 2014 as well. Increased numbers of positions in life sciences and as a result of mergers and acquisitions means that interim management is a potentially lucrative option for many so far this year.

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IR35, the tax legislation which has had more column inches dedicated to it than almost any other in the world of contracting, has been under fire again. The IR35 Forum, set up specifically to introduce an element of transparency to the ongoing consultation process, has been criticised for their decision to make less of the contents of their meeting public by including only major decisions and talking points in the minutes. There was also criticism of the fact that it took around four months to deliver the document which ran to a mere 1,225 words, demonstrating that there was a lack of concern about providing interested parties with the means to engage with the forum. Limiting the level of information available, especially given the fact that the legislation itself is still generating significant controversy, seems contrary to the state purpose of the forum, according to many commentators.

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VAT is in the news again as the Budget made it easier for private sector companies to pitch for tax-payer funded works by removing the requirement to pay VAT charges. Until now, ‘in-house’ teams have had a significant advantage over external bodies when it comes to putting together proposals, given that they would need to reduce their prices by 20% in order to remain competitive in the field of public sector outsourcing. The change, which was scheduled to come into effect on 1st April 2015, was designed to allow eligible public bodies to reclaim VAT paid on outsourced and shared services.

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The Oil and Gas industries received a boost when it came to the budget, with a series of tax cuts announced in the Budget. IPSE expressed their relief that the contribution of these industries had been acknowledged when it came to providing them with the means to increase investment in the sector. Taxes were cut in order to free up funding for research, development, investment in infrastructure and exploration, all of which could secure the future of the sector for the long term and provide fuel security for the UK as a priority. This has meant that there are likely to be plenty of opportunities for contractors in the sector as companies are expanding their operations using skilled and experienced workers to help them achieve their goals.

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In a month where every UK tax payer was anticipating the news from the Chancellor’s budget, much of the speculation focussed on the potential for independent professionals to benefit from the news. There were some other stories which grabbed the headlines in the run-up to the announcement.SJD Accountancy - Accountant

HMRC attempted to combat misunderstandings about the tax system in an attempt to reduce the number of people who were managing to file their tax returns on time, but making avoidable errors in doing so. Many people are aware of the potential to be fined for failing to complete your tax return, but the penalties for completing on time but incorrectly are less publicised.

This year, HMRC have contacted those who failed to fill out their details correctly and provided them with guidance on the system in order to help them ascertain where they went wrong, work out if they have ground for appeal, and talk them through the process if they need to do so. Click Here for more >

February has been a month with promise, according to industry experts who have been analysing the job markets and making predictions for the rest of the year. Certain sectors may be increasing their hiring, creating more opportunities for those who have specialised skills and experience in those industries.SJD Accountancy - News

A survey of the finance sector showed that there were plans by many financial institutions to increase their spending on IT, creating roles which are likely to be best suited to those who have expertise in system design. Most of those who are planning to up their budgets are doing so in order to reach new customers and increase engagement as well as attempting to optimise their efficiency.

Building societies are most likely to spend on IT infrastructure, with their responses to the study revealing a forward-thinking approach to apps and system development when it comes to planning growth. In contrast, banks are significantly behind their counterparts when it comes to investment in their IT systems and applications, believing that they were in no way vital to their future growth with just one per cent believing that this was the secret to ongoing growth.

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