Employed and self-employed income

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Firstly, our congratulations go to Gary, his family and his colleagues on the 15th anniversary of warrington-worldwide. WatkinsonBlack are pleased to have been associated with warrington-worldwide for much of this period. Now, to work ….

Whether you are employed or self-employed can have a huge impact on the net income received from a fixed amount of gross income, the reason being not only the massive difference in the National Insurance costs but also the different rules governing the deduction of expenses. As the terms of reference of this latest report state, getting the status wrong can be very costly for a business and for the individual concerned, and is a significant factor in the increase in personal service companies.

As part of its published policy of restructuring the tax system, the government have instructed The Office of Tax Simplification (OTS) to consider the dividing line between employment and self-employment and whether the distinction between the two should be redefined.

For the vast majority of people, of course, it is obvious whether they are employed or self-employed. However, there is an increasing view that the law in this area has not kept pace with changing work patterns, and that this is causing uncertainty for a large number of taxpayers. More and more frequently, people are working for more than one business and they can often find themselves classed as an employee for one job, but self-employed for the other

The review will consider:
-Whether the UK’s current employment status tests result in uncertainty and, if so, in which areas.
-Sectors and types of engagement where difficulties in administering the tax rules are relatively common for any or all of those involved.
-How well the current rules and guidelines deal people with multiple roles.
-Trends in employment law.
-HMRC guidance and advice.

It is important to know the difference between inside vs outside ir35. The review, however, will not consider the IR35 or the CIS regulations. Equally, it will not look at the expenses rules for employed and self-employed people. The report will be prepared in time for next year’s budget and the intention is that it will identify any areas which could be dealt with immediately. However, it is anticipated that if the report points the way to significant reforms then these could not be put into effect until after the next election.

WatkinsonBlack are pleased to advise on these as well as other matters, including providing a very cost-effective payroll bureau service. If you want to arrange a no-obligation initial meeting on any taxation or accounting matter then please contact us.
Please note that these ideas are intended to inform rather than advise and you should always obtain professional advice before taking any action.


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Experienced journalist for more than 40 years. Managing Director of magazine publishing group with three in-house titles and on-line daily newspaper for Warrington. Experienced writer, photographer, PR consultant and media expert having written for local, regional and national newspapers. Specialties: PR, media, social networking, photographer, networking, advertising, sales, media crisis management. Chair of Warrington Healthwatch Director Warrington Chamber of Commerce Patron Tim Parry Johnathan Ball Foundation for Peace. Trustee Warrington Disability Partnership. Former Chairman of Warrington Town FC.

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