As the financial year draws to a close, there are always jobs to be done to ensure that your finances are in order. For those who are super efficient, April is the time to complete their self assessment tax return, but for contractors, April 2016 means a lot of changes and being prepared could save an awful lot of money.
HMRC define SDC and attract criticism from experts
Many contractors are eagerly awaiting the end March when the promised guidelines for supervision, direction and control will be published by HM Revenue and Customs. The thorny issue of what constitutes SDC has been the subject of much discussion over recent months, not least because there is some concern over the manner in which the new travel and subsistence expenses rules will be applied. Despite plenty of advice having been given to the government on this matter, their most recent efforts to define SDC have been widely panned, so the end of March could see an end to the significant speculation on the matter.
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Dragons’ Den star criticises dividend plans
There is no shortage of people ready and willing to point out the flaws in the chancellor’s plans to change the way in which dividends are taxed, and the latest person to add their name to that list is Neil Westwood. Known for his successful pitch to the entrepreneurs of Dragon’s Den, Mr Westwood believes that the new dividend tax rate will unduly penalise small and micro-businesses, as do the nearly 50,000 people who have signed an online petition which will have to be debated by parliament if it reaches 100,000 signatures.
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NHS boss slams PSCs
HM Revenue and Customs have targeted personal service companies in their attempts to reform the way their users pay tax, and now one of the chief executives at the NHS has joined in. Jim Mackey has recently been appointed with responsibility for improving the NHS and regulating its providers and his view is that there are too many people working thorough PSCs and, in his view, paying too little tax. The £2 billion overspend on the part of the NHS has been predicted to increase to around £4 billion if they can’t get their spending in hand and Mr Mackey believes that this can best be tackled by stopping the practise of staff leaving the service and returning as contractors.
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Contractors reminded to maximise dividends before rules change
April 6th is a date that most contractors have in their heads as the day on which the rules concerning the way dividends are taxed will change. Unless the government bow to pressure from industry bodies, it seems likely that it will be a matter of weeks before those who rely on dividend income will have to re-think their finances in order to ensure that they are still maximising their earnings. Specialist contractor accountants are offering advice on the best way to ensure that your income is as unaffected as possible by the planned tax increase.
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