According to findings made by Gorilla Accounting, a third of self-employed workers in the UK were unaware of IR35 and further tax changes that are coming into place today. In order to prepare for this change in accounting and tax repayments, Operations Manager, Richard Hepburn has shared his insights into the new budget set by the government and how Britons can keep up with their finances.
Operations Manager, Richard Hepburn at Gorilla Accounting shared his thoughts on what Britons are going to expect when these tax rules come into effect.
Hepburn said, “There are lots of upcoming tax changes that will impact a variety of business owners across the country some of the key changes include increases in the personal allowance and basic rate tax band, to slight increments in both the employers and employees NI thresholds. Also, self-employed people operating through a limited company, who earn profits over £250,000 will be required to pay a 25% corporation tax from April 2023.
“There is also the introduction of the ‘Super Deduction’ from April, which will provide businesses with 130% tax relief on eligible capital purchases – designed to encourage investment in the UK, post Brexit and Covid-19.”
He added, “The IR35 tax legislation hasn’t changed, it is still concerned with combating disguised employment but what will change is the shift in responsibility for determining the IR35 status of an engagement, shifting from being the PSC’s responsibility to the end clients, at the top of the supply chain for medium and large businesses. This will impact many sectors, including locums, consultants, software developers, contractors and freelancers.
“The government hopes that by doing so it will lead to an increase in compliance across the industry and an increase in tax receipts, through PAYE. Anyone currently providing their services, via an intermediary (their own limited company/PSC) should already be aware of the IR35 tax legislation, as it has been around since April 2000.
“To date, all those working in the private sector have been responsible for determining their IR35 status. Changes should have already been communicated to those in contract, by their end client and/or agency. The tax payable per month / year would be dependent on a variety of factors.”