UC Finance urges contractors to protect against aggressive IR35 compliance and tax investigations

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UC Finance — the invoice finance company behind unique Timesheet Finance package - is today urging contractors, freelancers and one person limited companies to tackle any IR35 compliance issues and protect themselves adequately against the costly impact of tax enquiries, sooner rather than later.

As the number of tax investigations of small businesses, contractors and freelancers rises steadily - and in particular with the added IR35 compliance requirement for contractors and freelancers - UC Finance warns UK contractors that the days that only big brands needed to consider the potential effects and costs of an inquiry by the HMRC are gone.

“Contractors, freelancers and one person limited companies are increasingly finding themselves subject to enquiries into IR35 status and tax compliance. Such investigations have many financial implications and outcomes, not least the real possibility of being called to answer at a tax tribunal - an inconvenient, costly and invariably unpleasant experience for any contractor or freelancer,” explained Joanna Holloway, Managing Director of UC Finance.

With the bulk of IR35 enquiries starting with a PAYE compliance visit, an enquiry from a tax return or more recently being awarded a low score from HMRC’s new Business Entity Test, sky high accountancy fees, added stress and an increase in administration resources are just some of the ways that an enquiry may affect businesses, warns UC Finance.

Calling on contractors to take a ‘belt and braces’ approach to compliance and tax enquiry protection and explore all options in their quest for peace of mind, UC Finance lays out the dangers and possible options available to the UK contractor market: Without adequate protection, the finance company warns that costs associated with a tax enquiry may command potentially business-crippling amounts.

Advocating simple yet effective steps toward achieving total protection, UC Finance encourages contractors and freelancers to seek out a team of specialists that hold the professional experience and expertise to check their IR35 status and to ensure all contracts are compliant through simple assessment. These assessments - supported by Contract Review and Tax Enquiry Protection schemes - form the ‘belt and braces’ approach to contractor finance and compliance management recommended by the invoice finance company.

An IR35 Contract Assessment enables individuals to ensure the contract is IR35 compliant and avoid IR35 issues in the future. Providing an overall ‘pass or fail’ opinion plus a concise list of any necessary changes, the contract should be assessed by independent IR35 specialists consultants who have a wealth of experience in dealing with status enquiries.

Understanding that by proactively seeking a review or assessment of contracts individuals can greatly reduce the risk of penalties being applied should the IR35 status be subsequently challenged, UC Finance explains that it demonstrates due diligence - that the individual has taken ‘reasonable steps’ to ascertain whether their status falls outside of IR35.

Serving to provide representation and limited cover for contractors, freelancers and one person limited companies, tax enquiry protection packages support individuals during an investigation and during any consequent disputes regarding IR35 status, PAYE/NIC, Section 660A and VAT issues, or further enquiries involving HM Revenues and Customs and tax tribunals.

“Being so closely involved with this vulnerable business community, we’re seeing too many people being subjected to enquiries that are costly not to mention stressful. We believe it’s vital to make people aware of how to avoid IR35 compliance issues and the steps they can take to minimise their risk of being investigated in the first place, and also the products available that are designed to protect contractors and freelancers should they come under review,” Holloway added.

With many products and services available to contractors and freelancers offering preparation, guidance and ultimately extensive protection in the event of an enquiry - including cover for retrospective years - UC Finance advises that incurring damaging costs through tax enquiries is avoidable.

Innovative contractor finance company UC Finance, is working in partnership with QDOS Consulting - one of the UK specialists in this area - to deliver expert advice and access to the best products and services on the market.

Further information can be found at: http://www.ucfinance.co.uk/ir35taxprotection

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