Contractor & IR35 Tax
IR35 & CIS Tax
For Changes to IR35 tax and for CIS tax services in Rayleigh and Essex, get in touch with the specialists at Accounting Kiwi.
Tax Help for the Building Trade and Professional Contractor
IR35 tax - big changes for contractors using a Personal Service Company
If you are providing your personal services through a limited liability company then this will affect you. Tax law is changing as of April 2020 and it is more vital now than ever before to understand your position regarding IR35.
The new change from April 2020 brings many contractors working in both the public and private sectors within the on-payroll rules.
Large and medium sized companies are obliged to make the decision as to whether a contractor falls within the rules and then apply the rules. This means that a contractor will be taxed for Income Tax and National Insurance as if they were an employee, unless the business they are contracted by is defined as a small company under company tax law.
A small company engager does not have to apply the rules at present (this may change in future), leaving the contractor to determine their own IR35 status.
The change results in many personal service company contractors finding themselves being taxed as an employee but without employee rights, or having to revert to being an employee to retain their job and income. Of course, their personal service company may become redundant, and this leads to the question of how best to deal with retaining or closing the company.
We specialise in working with professional contractors, and understand the complex rules in this area. We can help with forming or dissolving limited liability companies, and we can advise on the most tax-efficient solution for your situation.
Where required our service includes a contract compliance review by a respected law firm specialising in IR35. This will enable you to structure your contract correctly and to start working knowing the likely tax impact.
We support our contractor clients with full bookkeeping, accounting, company and personal tax services, VAT and payroll. See our accounting services page for more information.
The CIS tax system affects most businesses and self-employed workers in the construction industry. It is a complex piece of tax law, which essentially requires contractors to withhold tax from their subcontractors at the point of payment.
Contractors are required to report these deductions every payroll month through the online CIS reporting system and pay the correct amounts to HMRC. They are also obliged to provide a certificate to subcontractors showing the amounts earned and tax deducted.
Subcontractors are required to be a registered business or self-employed, and to submit a tax return each year. They report their total income, are allowed certain business tax allowances, and can offset the CIS tax deducted against their tax liability.
Accounting Kiwi specialise in CIS tax matters. We help contractors ensure their CIS deduction and reporting system is up to scratch, generally incorporating this process with the bookkeeping system.
We work with subcontractors to ensure they maximise their legal tax deductions and maximise any tax refund.
Because CIS tax deductions from company income affects cash flow we help clients minimise the impact through planning and applying for lower CIS tax rates.
Great bookkeeping systems are a pre-requisite to making CIS a simpler and less stressful process, so get in touch with our staff to find out how we can help you
Get in touch with Accounting Kiwi today for IR35 and CIS tax and accounting services for your business.
We also help you with business development services for your company.
Come to Accounting Kiwi for IR35 and contractor accounting services throughout Rayleigh and Essex.
Call us now on 01268 777 828
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