IT Contractors Face Tax Changes 2017

A number of tax changes hit the contractor world. There is a Flat rate scheme which is being followed by a number of contractors. It is considered as a basic source for reducing the VAT of administration. On the other end, HMRC has come to an analysis that this scheme has been abused by a number of contractors. For this reason, they have changed the rules and regulations in this category. It will be a great way to approach and timely close the loopholes and stop this particular abuse.

Public Sector Face A New Change in IR35 Rule:

April 2017 has brought a lot of changes for contractors. One of them is for those working in a public sector. They are being subjected to the IR35 rules. This simply means that the NI is increased for employee and they will be required to pay for it. On the other end, there is none kind of compensation being provided in this regard.

Need For A Check Of The Employment Status

A new tool has been introduced by HMRC. It is called as the 'employment status checker'. It is quite helpful in checking the status of tax for one's business. The best thing about it is that it is a free tool and anonymous as well.

Dividends & Tax Thresholds

According to the recent changes, it is being cleared that there will be a need to pay the dividends according to different categories. For example;

¥ Basic Rate Tax- 7.5% of dividend

¥ Higher Rate Tax- 32.5% of dividend

¥ Additional Rate Tax- 38.1% of dividend

Nowadays, the dividends which could be received is 5000 pounds. This is supposed to be spared from any additional tax. Moreover, in 2018 this amount will be reduced to 2000 pounds. The Landlord Accountants in London, Kingston Accountants or the Wimbledon Accountants would be helpful in giving a quick overview.

Conclusion

Thus, there have been a number of changes being made for the sake of IT employers and it is being suggested by the Landlord Accountants in London, Kingston Accountants and Wimbledon Accountants that the IT contractors should take all of these changes on serious notes. It is considered as their biggest responsibility. In case if these private contractors will neglect the changes and will not follow then HMRC is liable to charge them penalties for not following the rules and regulations. Moreover, if one is not clear about the latest changes i.e. how these changes will be impacting their business then it is considered as their biggest responsibility to get in contact with the accountants who could be helpful in giving them the right overview of what is going on in the market. Moreover, what sort of employment status do they owe? And what sort of things should they be doing in order to stay according to the latest rules and regulations? This could be a plus point for saving them from any future interests or penalties. If you are an accountants for IT contractor and you haven’t go through the changes made in April 2017 then you should visit the Gov Uk site and get your records updated accordingly.