The First IR35 Letters Have Been Sent Out to IT Contractors

HMRC and the Government have taken the first steps in their campaign to bring in much more money from contractors with the sending out of the first batch of letters to contractors asking them to sit the IR35 Test and to prove that they are outside IR35.

A Review Panel of IR35 set up by the Government to look at IR35 again, recommended that IR35 should not be abolished, with one of the main reasons being that many contractors would leave their Umbrella Companies and go back into Personal Service Companies which was seen as a bad thing as the Government and HMRC get an average of around £10,000 a year less in tax and National Insurance contributions from contractors in Personal Service Companies compared to those in an Umbrella Company.

Indeed, the Government went further and said in the last Budget that they would ‘strengthen IR35’.

To this end, they set up three new Compliance Teams based in Salford, Croydon and Edinburgh and hired a total of 36 Compliance Officers for the new teams while they are cutting back Government staff elsewhere. It looks as if the Government see contractors as a means of increasing the tax take and see the IR35 tax as a means of doing so. IR35 was set up in 1999 to catch ‘disguised employees’, i.e. because of the spate of companies laying off employees on a Friday and starting them again in the Monday as contractors doing exactly the same job but providing tax advantages for both the company and the new ‘contractor’.

However, it caught many genuine contractors in its net.

Now it looks as if the Government are going to use this IR35 legislation to increase their tax take by classifying many genuine contractors as ‘disguised employees’ and forcing them to pay more tax. To this end they have, with the help of the Professional Contractors Group, devised a new IR35 Business Entity Test that contractors can take online to see if they are at high, medium or low risk of being caught by IR35.

Although the test is not definitive it appears to place virtually all contractors as being of high risk of being inside IR35. Although HMRC devised the test with the PCG, it was HMRC who devised the scoring system alone which appears to show most contractors to be at high risk.Now, the new Compliance Teams have sent out their first letters to contractors who use Personal Service Companies asking them to sit the test online and also asking them to send evidence to prove that they are at low risk of being caught by IR35.

If they can do that then they will not be investigated for a further 3 years but if they cannot, or they don’t reply (and they have only been given a month to reply), then the next step is likely to be a visit from the Compliance Team. If it is found that the contractor is inside of IR35 then this could result in the contractor having to pay tens of thousands of back tax. The end game here appears to be to scare contractors into getting out of Personal Service Companies and joining Umbrella Companies.

Do the maths.

There are currently 200,000 contractors using the Umbrella Company route and each of them pays £10,000 a year extra to HMRC and the Government. That’s £2bn extra a year that the Government didn’t get prior to 1999 when IR35 came in. According to the PCG there are 1.6m freelancers in the UK, most of whom would fail HMRC’s current IR35 Business entity Tests.That’s a very tempting sector for the Government and it doesn’t need any change in the legislation.Their main aim is not to catch contractors but to get high profile publicity in order to scare tens of thousands of contractors to take the Umbrella Company route rather than the Personal Service Company route.

Gerry McLaughlin is the CEO of UK IT Contractor umbrella company website www.ITContractor.com.

Dealing with Agencies – Getting the Best Rate Possible

Contractors are often duped by wily agencies and need to know what to look out for when dealing with agencies.

They can chose their Umbrella Company and their Contractor Mortgage company but they can seldom choose their agent as they tend to have to take whatever opening comes up from whatever agency have the requirement .

The biggest mistake that contractors make is in that the agency that they deal with is ‘their agent’. They imagine that they are like agents for actors who normally take 10% of what they can get from a client and so are motivated to get as much as they can for the actors that they serve.However, it is very different in the contractor / agent relationship. Indeed it is only contractors who call them agents as they tend to call themselves recruitment consultants.

Contractors in Umbrella Companies are sometimes better protected as they can ask the advice of their Umbrella Company on rates whereas Limited Company contractors are very much on their own when negotiating.Indeed, some Umbrella Companies may have relationships with particular agencies and may insist that their contractors get a certain percentage of the rate that the agency gets from the agency.

The first duty of recruitment consultants or agents is to maximise the returns for themselves and for their agencies. This is often to the detriment of contractors.As there is usually no set percentage of what the client will pay that should go to contractors and what should go to the agency, the agency will try and take as big a percentage as they can.

Contractors, especially new contractors, often find out that the agency is taking 50% or more of everything that they earn.Agents work on commission – so the less the contractor gets the better for them. Indeed, agents work on ascending scales of commission. In other words, if they hit certain targets then they might get 10% of what the agency gets. If they hit higher targets then they may make 20% or 30% or even 50% of what the agency gets.

Therefore it is in their interests to take as much as they can of what the client is paying and to leave the contractor with as little as possible of what the client will pay.Of course, more experienced contractors will be wise to this. However, agents, who are doing this kind of thing on a daily basis, are better attuned to this ‘game’ than the contractors, who only negotiate every few months at the most.

Most contractors make the mistake of looking at recruitment consultants as ‘their agents’ and let the agency tell contractors what their rate is going to be especially in their first few contracts. However, once they realise that the agency is a competitor for the money that the client will pay then their attitude changes and the contractor tries to dictate more the amount of money that goes to them from the client rather than the agency.

This advice may help new contractors to avoid this mistake and maximise their own returns from the work they do.

Gerry McLaughlin is the CEO of UK IT Contractor umbrella company website www.ITContractor.com.

5 Reasons For Contractors to Choose an Umbrella Company

Contractors normally operate in one of two ways, either by using a Limited Company or by being part of a Contractor Umbrella Company.

Here are reasons for a freelancer to operate using an Umbrella Company

1. The Contractor is caught by IR35.

If a contractor is caught by IR35 he or she is best served by being inside an Umbrella Company as they can claim a limited amount of expenses which they wouldn’t be allowed to do if they simply paid the IR35 tax.

2. The Contractor is not sure if he or she is caught by IR35

The taxman decides on a contract by contract basis whether a contractor is inside or outside of IR35. This means that the contractor may be inside for one contract and outside for the next contract. In this situation the contractor may want to operate through an Umbrella Company just to be on the safe side.

3. The Contractor wants to concentrate on Contracting

Umbrella Companies treat contractors as employees who can claim certain expenses. Many contractors don’t want to handle their own VAT and book keeping and are happy to pay someone else to take this responsibility off their hands so that they can concentrate on what they do best and that is contracting.

4. The Contractor doesn’t want years of an IR35 Tax Investigation

Many contractors who operate through Limited Companies have spent years under investigation for IR35 tax from HMRC. Many of them are then found to be outside IR35 but have wasted a lot of time and energy as well as worry in doing it. Others have been found to be inside of IR35 and have had to pay several years of back tax, interest and penalties sometimes amount to over £100,000. Many contractors don’t want the worry of having an IR35 tax investigation hanging over them

5. The Contractor can claim Expenses

Although the contractor can’t claim as many expenses as they would do if inside a Personal Service Company they can still claim a limited amount of expenses, for example, they can claim travel expenses, overnight expenses if they are staying away, pensions, memberships of professional organisations and contributions to charities which are all tax deductible.

It is every contractor’s choice depending on the way they operate. Are they ‘disguised employees’ or are they genuinely in business on their own account?

Do they want to manage their own affairs or do they want to concentrate on contracting and leave the admin to others?

Gerry McLaughlin is the CEO of UK IT Contractor umbrella companies website www.ITContractor.com.

Things to know about Google+

People have known Google as the number one search engine. Yes it is! Besides that, it is also the most visited website in the world. Whether an amateur or professional, young or old, man or woman, if anyone has to search information, he turns to Google. It is a web giant friendly enough for the people to like it sincerely. The reason behind this is the speed and accuracy that Google possesses. Type in any keyword and Google will show the results in seconds. The timing has increase many folds with the incorporation of new technologies. Google now gives results instantly as you key in the words. With its strong presence in the advertising and SEO industry, Google has spanned its reach via its social media application.

Google+ is a new social hub to connect to the masses for genuine information and entertainment, called as infotainment in the 21st century. Webs Design India It tries to target the popularity of Facebook and Twitter. Both these applications are very popular and businesses use them for promoting themselves. With millions of people logged in to Facebook and Twitter, sharing of information, pictures, videos and other media becomes simpler and enjoying. To beat the popularity of Facebook and the professionalism of Twitter, Google+ has come up with various cool and contemporary features that make it a must consider online application. Let us know some important things about Google+ so that it proves more useful to you than other social tools.

Google+ or simply G+ features ‘circles’ that are groups to which you add friends, family and acquaintances. The Google+ pages (promotional pages similar to Facebook pages) cannot add you to their circles until you add them in yours. Unless someone has added your G+ page to his circles, you cannot add him.

G+ pages are like G+ profiles with a few extra attributes. Businesses, bands, celebrities, charities or any organisation can use G+ pages to reach to a maximum audience and display their business. You can do all this without violating any rules or terms of social media.
G+ also provides security so that your business goes to the right audience. By default, the security is so set that anyone can view your G+ pages. However, you can adjust the security levels for limited viewing. The options are available as soon as you create a G+ page.

Facebook features a ‘Like’ feature to connect to a page. Similar to it is the ‘+1’ function of G+. Website Design Company Gurgaon If you like any page, you can ‘+1’ so that the people in your circles can know about it. ‘+1ing’ helps your G+ page to share your content over the Google network. It is a rumor that higher numbers of ‘+1s’ help in increasing the search engine value of a business.

Finally, it is very important to make you G+ page full of information and content. People should be able to identify, understand and connect to your business. This way you can make a stronger online presence over the Internet.

PPC Advertising Tips

Internet marketing is an essential step for a business to take to feature on the Internet. The web jungle is growing and to make a strong presence, one needs to initiate the steps to market his business. PPC is a growing business in today’s competitive world. Every business wants to stay at the top and when it comes for Google, staying on the first page becomes a necessity. It comprises of various processes like search engine marketing, search engine optimization, PPC, etc. Among these, PPC is a growing method that is driving up the sales of websites in small amount of time.

PPC (pay per click) refers to a promotion on Google. Web Design Delhi The ads of your business or company show out on Google result pages and if anyone clicks those ads, you have to pay for it. It is getting popular over the time as it gives very promising results. Apparently, those who have invested in PPC have benefited and grown in business. Here we give in some tips related to PPC so that you too can increase sales and earn a good amount.

Keywords are very important to reach to potential customers. With the right set of keywords, you can get high on traffic. You must keep two things in mind. The keywords you target relate to the overall idea of your business. They content should relate to the keywords and make sure you do not stuff unnecessary ones or use black-hat SEO. Yes, good SEO supports in PPC and the results can be better than expected. Thinking from the users’ point of view is also important. Think from his perspective what he should type to find your business. It is not necessary that users will take your website they way you do.

The correct set of keywords does only help in gaining traffic over the Internet, but also turning it into sales. With better keywords, you can explain the value and relevance of the content to the users, thus capturing his interest. If you have a better level of search engine optimization, you do not need to spend much for PPC. Investment for a small period can make your site popular over the Internet. The adcopy of your website should be clear and self-explaining. Adcopy refers to the content of the advertisement. A short and attractive adcopy can make your campaign worth viewing. It should be able to pull attentions and build the users’ interests.

The advertisements should land the users on a beautiful page that explains the products in details. SEO Company India A good landing page can definitely turn your promotion into sales. Most of the PPC service providers offer statistics. Make sure you analyze them for a better result of your investment. Also, provide some details of your business in your website. You can add genuine addresses and phone numbers of your company so that people can find your business easily.

If you keep the above-discussed points in mind, you can surely benefit from PPC advertising making your business more returning.

Choosing a low-cost hosting plan

Website hosting is always the matter of concern for small businesses. They have to look for the cheaper options because of the limited budget and resources. However, in today’s world of opportunities, it is not very difficult to find low budget hosting providers. Type in some keywords related to web hosting in Google and thousands of results pop up instantly. Each hosting company website talks of its special services and features. Choosing the best among them is a tough job that might confuse you if you do not have a similar experience earlier. Here is a small guide on low-cost hosting for people who own or are planning to own a website.

Every web hosting company, big or small, provides a list of services. Web Design India You should consider the features and choose your plan accordingly. The important factors to look over are – hosting space, bandwidth, database size, number of email accounts, uptime, etc. Choose the plan that provides enough space for your data. Also, remember that the website will grow in content each day. Therefore, there should be enough space to hold the content that collects over time. Your hosting plan should never run out in bandwidth. If it does, it will become a reason for embarrassment. Users will not be able to view it or log in. The database size should also be enough to store table with huge amounts of data.

Uptime is a very important factor of a good hosting company. Uptime is the duration in which the hosting server is live. Most of hosting providers claim of their ability to provide 99% uptime, but most of them fail. If the host is not, of a good quality, it might stop and the users present on your website might find an error page on their browsers. This might decrease the credibility and the business value of the website. You will ultimately result in contacting the host company repeatedly. SEO Services India You might also feel uncomfortable if the company does not provide good customer service. A company with good customer service is one that provides various ways of contacting it. Today, host providers offer chatting, emailing and phoning options to contact if any problem arises. They support in resolving the issues and help the website resume its position.

One of the most used business strategies used today is to keep the extra charges hidden. Most of the companies strip off the main price to attract customers. When the customers take the services or buy the products, the companies add extra charges. Therefore, you must always find out whether your host provider has any extra hidden charges with plan. If you do not consider this early, you might have to pay extra charges. You can definitely go for a low-cost hosting plan but you should also consider the facts talked above. This way you can host a website affordably.

Importance of SEO

Today the Internet has become a marketplace with hundred thousands of companies selling their products and services. The competition is tough and each one is trying hard to excel. Online presence has become a necessity for companies. Businesses are hosting website to connect to the global audiences. However, just having a website is not enough. It must be visible and easily accessible on the Internet. Today, most of the people use Google and other search engines to look for information. So, it becomes necessary for website to stay on the top of Google rankings.

SEO (Search Engine Optimization) is the process of tuning a website to make it rank high on search engine results pages (SERPs). SEO Company India It is the process of improving the ranking of a website. It is not a single process but a series of regular practices. You cannot make a website rank high instantly, but have to work for days, months or years. It consists of On-page and Off-page optimization strategies to tweak a website for some particular keywords. SEO is very important for every website and you should never ignore it.

First, you should outline the words and phrases (keywords) for which you want to optimize your website. These keywords should relate to the subject of your website. Putting the keywords into the content skillfully makes a lot of sense. It will help in optimization of the content. Next, you should try to get a good number of backlinks. You can increase your backlinks by exchanging links and social bookmarking. Posting articles and relevant content on different blogs and website also helps to backlinks count. Finally, you should update your content on a regular basis to attract search engines.

The major benefit of SEO is that a website or the business gets a global or local exposure. People recognize the company that adds to the credibility and sales. SEO India SEO helps to gain business in a cost-effective way. You do not need to spend any money on SEO if you do it yourself. However, you might have to pay a little amount if you hire professional SEO specialists. This small capital is the only thing needed for maximum popularity and exposure. SEO is an unpaid or organic method of gaining business over time. The best feature of SEO is long term positioning. Once you get a top position on the search engine result pages (SERPs), you can maintain the position for a long time. All you need is to work towards improving your website and its content day after day.

SEO has a great future in the time to come. With so many sites popping up each day, SEO specialists would be having lots of work to do. SEO is easy and beneficial for a website. You can find huge number of sales with a small amount of investment if you plan the strategies well.