The Umbrella Companies Blog Archive: May 2010
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Tackling seems such an innocuous term, it's something that usually happens between sportsmen as part of a game in which they are both willing participants. Even children are allowed to do it.

When HMRC choose to tackle something you can be certain that whatever they are tackling will feel it and be changed forever. The last time I heard HMRC using the term tackling was when they were tackling managed service companies, and speaking as someone who was working in the industry that was 'tackled' it's not something you'd choose to do twice, or even once. International Rugby teams should take a leaf out of HMRC's book.

So how are HMRC actually going to go about 'Tackling Offshore Tax Evasion"? According to Deloitte, people that fail to pay taxes on offshore income or gains could face penalties of up to 200% of the tax evaded effectively doubling the current maximum penalty. It's true that for the time being they are offering a form of amnesty if you manage to tell them before they find out (reduced penalties rather than none), but the time in which that's possible is shrinking.

With increasing co-operation (in the form of information exchanges) between countries and more importantly the financial institutions within those countries HMRC are getting a better view of offshore tax evasion all the time. I would imagine that a lot of companies are considering getting a word in early to avoid the consequences.

The new penalty regime was expected to come in April next year, but with talk of an emergency budget in June and the Conservative government hungry to reduce the deficit we could be looking at something happening a lot sooner.

Hugo
@GabemUmbrella
28/05/2010

It may have been touch and go there for a while, but we managed to elect a new government, even if there has been a lot of initial fuss about the process and the result.

Now we can finally start talking about their intentions with initial news about policy and where their focus will lie, and it's all starting to look suspiciously positive for the contracting world. I hate to say it but I'm starting to feel optimistic, this can't end well surely?

We've had it rough for a long time, with new pieces of legislation chipping away little bits of the freedom that temporary work relies on to function and thrive. There was IR35, the Tackling Managed Service Companies legislation, the Agency Workers Directive, and the looming False Self-Employment in Construction: Taxation of Workers consultation, all of which whatever their intentions pushed people from the contracting market into a full time employment situation that they didn't necessarily want to be in.

Things look to be changing though with the new government's focus fixed on deregulation, repealling restrictive laws and helping small businesses grow, all very good news. There is even talk of amending IR35 (a full repeal seems increasingly unlikely, despite pre-election indications), which depending on the scale of change could be a very popular move indeed in contractor circles. This will probably be included in the impressive sounding "Great Repeal Bill" perhaps the first piece of British law asking for audience participation. Is this a chance for people to have more of a say in things or is that dangerous optimism creeping in again?

I'd love to stay skeptical and suspicious, but I think the prospect of a sunny weekend has put me in too good a mood, for now lets cross our fingers and hope for the best, in contracting terms it can only really get better.

Hugo
@GabemUmbrella
21/05/2010