Contractor’s house of horrors

Don’t let the house of horrors spook you!

Forget The Shining, American Psycho or The Exorcist, sometimes the worries that contracting can cause can be far scarier! But fear not, Intouch Accounting are here to help guide you through each and every process, without the sleepless nights, or worrying if the Taxman is hiding under your bed…

 

Let’s take a look at some of the main concerns Limited Company contractors have and see why they’re not so scary after all:

 

IR35

Whether you’re a seasoned contractor or just starting out, IR35 should always be a consideration when starting a new contract. Whilst you should never let it stop you from contracting, it is something you need to understand and have respect for. Our clients don’t need to worry, as our monthly all inclusive service fee of £98 +VAT includes unlimited IR35 contract risk assessments.

 

Don’t let the fear of ‘what if’ stop you from contracting! In our ebrief: IR35 – the proposed changes we outline exactly what IR35 is, how it could affect you and the proposed changes for April 2016.

 

Claiming expenses

Do you worry about claiming for business expenses, for fear of not remaining compliant? Or do you hold back from purchasing equipment that you need for business, in case you can’t claim for it? Your contractor accountant will be able to give you advice on what you can and can’t claim. Intouch clients can ask their Personal Accountant about claiming expenses whenever they wish.

 

The ways in which you can claim for expenses will change in April 2016. Don’t wait until then; download our ebrief to get up to speed now.

 

HMRC Investigations

Probably one of the scariest things a contractor can face is a dreaded letter from HMRC announcing an investigation! You’re bound to feel some apprehension if you do receive one.

 

Intouch clients can stay cool as a cucumber, as professional fee protection service is included within their monthly fee. That means that if HMRC do decide to investigate them, they’re covered for up to £75,000 of accountancy fees per claim and don’t have to worry about the time or money it will cost. They simply forward their letter onto their Personal Accountant and they will do the rest! Wondering what the other benefits of fee protection service are and why you need it? Take a look at our blog.

 

Travel and Subsistence (T&S)

You’re probably going to have to travel to your client’s offices and that costs money. And what about the other possible expenses you’ll incur, like hotel rooms or food? These worries could put you off taking a contract, especially if you think it’s going to cost you an arm and leg.

 

Don’t panic! Whilst T&S can be a complex area to get your head around, your Personal Accountant will be able to guide you on what you can claim and the best way to do so. Like expenses, the way in which you can claim for T&S will change in April 2016. Take a look at our ebrief to get up to speed with the proposals HMRC are suggesting.

 

Just Starting Out

Considering contracting or have just started out and worried about what’s lurking behind every corner? We appreciate how daunting it can be when you’re new to the contracting game, but by having the right support behind you it can turn from a nightmare into a dream.

 

Why not take a look at the Contractor UK Forum, where you can ask other like-minded contractors questions and get a feel for what it’s like when contracting. If there are other topics you’ve heard of and want to find out more, or simply want access to a whole host of contractor resources, take a look around our website for useful videos and blogs.

 

Don’t let the thought of contracting spook you! Intouch Accounting are here to help you on your journey, by ensuring that you are able to face each challenge confidently and compliantly. Give our team a call on 01202 375 562 to discuss any aspect of contracting and to get you started.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

What are the benefits of having Fee Protection Service?

Fee Protection Service

In our blog last week we announced that we have enhanced our monthly service to include professional fee protection service. In this blog, Paul Mason of Abbey Tax explains the benefits for contractors in having this service.

 

A bit of background may be useful to put HMRC’s enquiry regime into context.  Prior to the introduction of Self Assessment, when you submitted your business or personal tax return, you would receive confirmation that it had been received and its contents accepted in all but about 90% of cases.  The remaining 10% – usually businesses – would either be contacted with queries that were either minor in nature (what we refer to now as “Aspect Enquiries”) or would be subject to an investigation (“Full Enquiry”) where HMRC wanted all the books and records. It should be added that at this point, no-one had yet come up with IR35…

 

The problem for HMRC was that this involved a lot of administration and when they undertook a full blown investigation, they had to give a reason for their enquiry, which more often than not was hotly contested by the accountant, resulting in a long-drawn out process.

 

Self Assessment changed all this.  Now, you only know that you won’t get an enquiry into your most recently submitted Self Assessment return if a year has elapsed since it was submitted (and even then legislation introduced in 2009 gives HMRC a subsequent bite at the cherry); and if you do get an enquiry, you may be able to guess why you were selected from the questions asked, but you won’t actually be given a reason by HMRC. They closely guard their selection criteria for fear of taxpayers changing their behaviour patterns.

 

If selected, then the one thing that we can guarantee: whatever the outcome of the enquiry, it is likely to be an expensive process to deal with.  For many taxpayers, the cost of professional fees in dealing with the enquiry has been enough for them to ask their accountant to get the enquiry closed – even if they ended up paying more tax than they should.  For others, the insult added to injury was paying several thousand pounds in fees to defend themselves, only to find that HMRC had accepted their original Self Assessment!

 

A good example of how expensive – and ultimately frustrating – things can get is IR35.  HMRC start this process by issuing a ‘Check of Employer Records’ letter, which requests all of the contracts in the period under enquiry (usually the last tax year) and asks the following question:

 

“Will you please also tell me whether you have considered the possibility whether the company is subject to what is commonly referred to as the IR35 Legislation? If you have, and have concluded that the company is not subject to that IR35 Legislation, then please explain to me the basis upon which you have arrived at that conclusion.  I am asking this to help me be fully aware of and understand any view you may hold on the application of the IR35 legislation”.

 

By the time you have reviewed the contractual terms (preferably with a professional) and spoken at length to have a detailed understanding of your working practices, and this has been carefully communicated to HMRC making it clear why we believe IR35 does not apply to your engagement(s), you could be staring at the wrong end of a £1,500 bill.  If HMRC decide that they do not accept this response, they will issue you detailed questionnaires to be completed and pursue the end client for their view of the working arrangements.  The resulting professional fees might easily reach£5,000.  If the matter goes to Tribunal, then the costs will escalate by a further £10,000 – £15,000.

 

Thankfully, the fee protection service will take care of the enquiry costs.  We can therefore focus on providing the best defence without you worrying about how much it is costing you.

 

So whether HMRC are challenging your VAT returns (checking the operation of the Flat Rate Scheme has been a high priority in recent years); or they are wanting to enquire into any travel and subsistence claims on your tax return; or decide that your engagements are caught by IR35, the fee protection service is there to help us support you when you most need it.  We want to ensure that when the Inspector calls, the odds are never stacked against you.

 

Get the service and cover you need to contract successfully with total peace of mind. Call our advisers today on 01202 912 831 to discuss your circumstances, or take a look at last week’s blog to discover what’s included in the new fee protection service.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

Introducing Intouch Accounting’s new Fee Protection Service

Fee Protection Service

At Intouch Accounting we pride ourselves on offering the very best service and expertise to every single client and encourage them to let us know if there’s something they need in order to help them contract successfully.

 

Over the past twelve months our Personal Accountants have seen an increase in the number of clients expressing their concerns about the risk of being investigated by HMRC. Whilst we currently offer IR35 contract risk assessments as part of our monthly service, we could clearly see that our clients’ fresh concerns required extra protection and reassurance.

 

That is why we are pleased to announce that we are now including within our monthly all inclusive fee of £98 +VAT a fee protection service that will protect you against unwelcome additional costs should an HMRC enquiry be raised relating to your Limited Company.

 

Why do you need this service as a contractor?

HMRC collected over £26.6bn from compliance activity in 2014/15 and in the July Budget £800m was allocated to continue this work, with a view of delivering an extra £5bn a year. It’s anticipated that these increased targets will trigger a significant rise in the levels of enquiries over the next two years. These can be lengthy in duration and expensive to fund on your own, even though there may be nothing found to be wrong.

 

Many other contractor accountants would charge extra for this service, as HMRC investigations can quickly become very expensive and time consuming. But we believe in offering one fixed price service that includes everything you need to contract with confidence. So why not opt for a contractor accountant that offers what you need, without any nasty surprises.

 

What’s included and how does it work?

On top of what’s already included in our comprehensive monthly service, you’ll also receive:

 

  • all the assistance you require to deal with any HMRC enquiries or investigation, no matter how detailed
  • unlimited access to a business legal helpline that offers 24 hour, 365 days a year advisory lines covering all aspects of commercial, employment, health and safety and business legal matters
  • payment of up to £75,000 in professional defence fees in the event of a tax enquiry.

 

We firmly believe this protection is essential to contractors and we want everyone to benefit from it should HMRC come knocking.

 

If you have any questions relating to the new fee protection service offering inclusion within our all inclusive monthly fee of £98+VAT, please do speak to one of our advisers on 01202 912 831.

Our next blog will look more in depth at the benefits of having fee protection service.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.