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New rules for contractors in public sector

Contractors working in the public sector faced a change in rules earlier in 2012 that is still having an impact on these workers today.

In May 2012, new rules were announced by the Government, stating that any public sector contractor working a contract that was set to last more than six months – and which paid in excess of £220 per day – must be able to show the organisation they are working for that IR35 rules does not apply to them.

IR35 is a piece of legislation that allows the Government to tax workers who receive payment for their work via a middle-man even though they have an employer-employee relationship with their client. IR35 changes were brought in earlier this year as part of the new IR35 administration framework and contractors are expected to be up to speed with these changes to ensure that they are paying the correct amount of tax.

Contractors who are unsure whether they are affected by IR35 or the new public sector rules can attain advice from a contractors accountant. Many workers throughout the North West, from Chester to Liverpool, use accountants to help them with their accounting. For contractors, it is important to have tax affairs in order to ensure they are compliant with UK tax law.

This story was explored as part of a yearly review of news stories that shaped contracting in 2012. The news stories that were featured focused largely on the IR35 changes and the subsequent knock-on effect that came with these changes.

Posted by Peter
December 31, 2012
Tax

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