| Umbrella Companies | | | | Umbrella Company Pay matters:- |
| After the Pre Budget statement, the Treasury | | | | "This is excellent news for contractors and quite |
| released this statement | | | | rightly recognizes and rewards the entrepreneurial |
| | | | spirit of contractors in seeking out new work and |
| Catching Renegades | | | | traveling to and from varied assignments. Often |
| So, it looks as if those consulted have managed | | | | contractors do incur significant costs for travel |
| to convince the Government not to legislate on | | | | and/or overnight stays and it is only right that |
| this. | | | | these should be recognized in calculating their tax |
| The focus is going to be on catching those | | | | liability". |
| companies that stretch the rules on expenses | | | | "In the past the industry has been criticized for |
| beyond the boundaries. | | | | encouraging contractors to claim for all expenses |
| The Government have also said that they could | | | | they could be entitled to just to minimize their tax |
| re-look at it again in the future if those at the | | | | liability. Clearly this practice is wrong. At |
| edge aren't reined in. | | | | Paymasters we feel it is important that relief for |
| However, this is very good news for both IT | | | | expenses are claimed but only when they are |
| Contractors and Umbrella Companies. | | | | incurred "wholly, exclusively and necessary in |
| If the Government had changed the rules on that | | | | performing your duties". Clearly traveling to a |
| the Umbrella Companies could just have become | | | | client's premises is often critical for the work to |
| payroll companies. | | | | be performed and correctly supervised by the |
| Great News | | | | client". |
| Said Rob Crossland of top Umbrella Company | | | | 360 Group |
| Parasol:- | | | | Brian Keegan, MD of 360 Group says; |
| This is great news for contractors who work for | | | | "This proves that government has listened on this |
| Parasol and means that the risks that contractors | | | | occasion and that maintaining a flexible working |
| take in finding work, traveling and working hard | | | | model is key to seeing UK PLC through these |
| have been recognized. Treasury goes on to | | | | challenging times". |
| suggest that HMRC will refocus its efforts on | | | | Keegan goes on to say "Following the consultation |
| ensuring poor levels of compliance are addressed | | | | Government now has a better understanding of |
| - a measure Parasol wholeheartedly agrees with | | | | the vital role umbrella organizations play and that |
| and promoted as the correct solution through | | | | umbrella do not exist purely to provide tax |
| lobbying and consultation directly and via the | | | | savings to workers. Umbrella providers now have |
| Service Providers Association (SPA). | | | | the opportunity to prove that we have a |
| Parasol has always promoted the accurate and | | | | legitimate place in the economy and |
| ethical claiming of expenses and has never put | | | | demonstrating ongoing compliance with HMRC |
| contractors(TM) livelihoods at risk. In some ways, | | | | rules is essential." |
| the news in today's PBR vindicates that stance. | | | | 360 groups, like other interested parties has been |
| We will continue to work with HM Treasury and | | | | heavily involved in the consultation process and |
| HMRC to ensure contractors(TM) and | | | | sought to provide feedback from agencies and |
| freelancers(TM) unique place in the UK economy is | | | | end clients to Her Majesty's Treasury about the |
| recognized and understood. We welcome this | | | | real benefits professional employer organizations |
| sensible approach by the Government in times | | | | can provide. |
| which are already challenging enough. | | | | If anyone would like a copy of the 360 group |
| PCG | | | | consultation submission October 2008 please email |
| The Professional Contractors Group put out | | | | Toni Carter on |
| statement saying the following:- | | | | Danbro |
| There was good news, however, for freelancers | | | | Said Damian Broughton of Danbro:- |
| concerned at the prospect of aggressive | | | | "Contractors will particularly welcome the decision |
| legislation on umbrella companies' and agencies' | | | | not to change the rules on expenses. If they |
| expenses. Mr. Brazier said: "PCG advised the | | | | operate through an umbrella company, choosing |
| Government not to pursue either of the courses | | | | one with 100% HMRC compliance status, like |
| of action it proposed - we are pleased that it is | | | | Danbro, will give them confidence that their |
| focusing on making the existing rules work | | | | expenses arrangements will meet with the |
| properly as we recommended." | | | | taxman's approval. |
| According to Compliance Manager, Mike Grey, at | | | | |