Expert information about tax schemes
"Contractor tax solutions" have been in the news a lot recently. Not always for the right reasons.
You’ve likely heard about them.
Your accountant might even have offered you one.
Some solutions claim to enable contractors to keep up to 88% of their take home pay while remaining inside the law!
Most sound too good to be true.
Many of them are.
Has anyone has approached you with any such solution?
Ask for professional advice on the potential consequences before doing anything.
Talk to the experts at Acconomy first.
For some this isn’t just business, it’s personal
The law is clear: tax evasion is illegal, tax avoidance is not. Only you can decide whether you believe tax avoidance is acceptable. It is your personal choice.
The IPSE has around 20,000 contractors and freelance members. The vast majority use Personal Service Companies (PSCs) to carry out their profession. This is not a ‘tax dodge’. It's often is the only mechanism through which an agency or end client will agree to engage you in a contract.
So, trading as a PSC is the only option open to most contractors. This is the way "employers" (end clients and/or agencies) shift the burden of responsibility. It is for you, contractors or freelancers, to determine your employment status, not them.
Why do they do this?
The risk of getting this wrong is significant. You'd be liable not only for employee National Insurance but the employer’s as well. Your Personal Service Company is also your employer. This adds up to a tax charge of over 45% on almost all your income.
It's our job is to make sure you're in the right trading solution for you. This will take account of your personal attitude to risk and reward and keep you on the right side of the law.