Kings Professional Book Keeping Institute of Certified Book Keepers

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Kings Professional Book Keeping

Independent Contractor Status

In 2017 and onward, the authorities continue to poke and pick at holes and blemishes, like a child with a scabby knee unrelenting in their zeal to thwart the contractor! Several contractors have contacted us, as to the proliferation of “In House” payroll schemes set up by agencies and end users to manage contractor/client payroll. These schemes are not effective for the contractor who requires flexibility and seeks to chase rates and good working conditions. Many of these schemes have their origins within the controlling structure of the agency or the end user. Surely HMRC would be concerned about A; the direct link and B; the outsourcing of the payroll in it’s entirety?
Confusion is rife with legislation, HMRC withdrew the overnight allowances paid to most professions that require the contractor to “stay away”, they then amended the website to confirm that the transport industry should not have been included in these directives, citing a lack of recourses for the error on the website! An excuse I might use in the future with filing returns.
Contractors fail to differentiate between the aspects of Self Employed and Directing their own Limited Company. The first is regarded by HMRC as “A Loaded Gun” (their words not mine) the second has a legitimate PAYE Scheme for the director, reported via the RTI Scheme portal, confirming their status as “Employed”. Should HMRC’s ultimate goal be to achieve a figure of 95% of the UK workforce enrolled within a reporting PAYE Scheme, I am pleased to help them in this challenge by supporting all of our contractors to register their incomes through their company PAYE Scheme.
To conclude, I will unravel sections of the gossip one by one, NIC’s, rates of taxation, contractual status etc. but suffice to say that HMRC needs to embrace the changes in patterns of the modern workforce, and understand that huge portions of the workforce no longer have the opportunity to a work until retirement for a national industry, Bob’s words not mine “The Times they Are A Changin”.

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