Orange Genie News

Two thirds of investigations yielded a result for Her Majesty's Revenue and Customs.

HMRC conducted 5 times as many investigations into those it suspects of abusing the IR35 rules on tax and national insurance for contractors this year compared to last. There were 256 cases in 2012/13, compared to just 59 investigations into IR35 in the previous year. 
 
The IR35 rules were introduced by HMRC to target those falsely registering as self-employed for tax purposes. 
 

HMRC have revealed the ‘top ten oddest excuses’ for late tax returns. Among the reasons people have given for sending in their returns late include a self-employed builder who blamed the death of a goldfish and a woman who blamed a volcanic eruption.

The list is as follows:

1. My pet goldfish died (self-employed builder);
2. I had a run-in with a cow (Midlands farmer);
3. After seeing a volcanic eruption on the news, I couldn’t concentrate on anything else (London woman);
4. My wife won’t give me my mail (self-employed trader);

Most people are aware of the need to consider insurance for life’s unexpected and unwanted eventualities. As an employee, many will have been used to benefiting from protection provided by their employers : life cover and sickness pay, whilst others will have taken the personal step to arrange their own policies. Not all policies are equal and it is important to regularly review the protection in place to ensure it continues to offer you and your family the best chance of not experiencing financial difficulty should the worst ever happen.

Are you on track to reach your retirement goals? When it comes to planning your retirement, it is important not to underestimate how much income you will need per year to maintain a comfortable living standard. A recent report by Prudential shows that those who will be retiring within the next 12 months will be expecting a larger income than those who took their pensions in the last 2 years at £15,800, £500 higher than last year. This optimism comes after a five year period in which people’s retirement plans had been crushed by the market crash. With those retiring before the recession in 2008 expecting to command an average income of £18,700, nearly £3000 higher. 

Over recent years Freelancers and Contractors have grown in numbers and now represent a substantial element of the labour market. Many contractors choose to enter the labour market through their own Personal Service company and as such they are able to structure their rewards in a way that is most suited to their circumstances. Traditionally many contractors choose to withdraw funds through a combination of salary and dividends – this is often a concept not understood by high street lenders and is sometimes cited as a barrier to choosing the contracting route.

A lifestyle decision to enter a contracting career and legitimate tax planning should not detract from a contractors ability to obtain a competitive mortgage. Orange Genie Accountancy work closely with Contractor Financials who specialise in providing mortgage advice to contractors

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