This may not apply to many people, I understand, but if this is you, then changes are coming that will impact the amount of money in your pocket.
For several years now we’ve had a bit of legislation with the very catchy name of IR35. This applies to you if you work through your own limited company, but you only work for one person. This started as quite a small piece of legislation only targeting certain sectors. It then extended it’s net to include public sector workers and from April 2019, it will more than likely be applied to the private sector too, but what does this actually mean for you?
As a company you enjoy certain tax breaks, paying tax at a lower rate and no NIC to name a couple. Well, if IR35 applies to you, then your company is assessed for taxed and NIC as if it were a person, so immediately there will be an additional NIC cost. There will be literally no tax advantage of having a company. You will still have the limited liability a company gives you, but my advice has been to people in this situation is to consider carefully if the company route still remains the best option.
Who is likely to be effected? If you are say, an IFA working through your company for one firm, or a building sub-contractor doing the same, or an IT service provider, so really anyone who operates through a company. Whilst it is yet to be confirmed this will be applied to the private sector from April 2019, I think we will find many people are effected by this, there have already been some high profile cases in the public sector not ending well for the tax payer, Christa Ackroyd being one.
If this is something you’d like more advice on, our team would be more than happy to help.
Office Telephone: 01752 895648
Office Address: 15 Erme Court, Leonards Road, Ivybridge, PL21 0SZ