Ways in Which IR35 Can Affect Your Professional Career
A huge number of individuals today choose to have a career as an independent contractor because of the huge amount of freedom it gives to their lives. These individuals are not usually bound by company rules allowing them to move a bit more freely when compared to a regular employee. There are however, a number of factors that can get in the way in helping you find success with your endeavors. One of them in particularly, can be found in the form of IR35. Let us look at some of the reasons why IR35 is something that should not be taken lightly or for granted.
It should be noted that several companies today hire independent contractors because of the huge amount of savings they get from the acquisition of their service. Their job ends after the contract has expired giving them little commitment with the contractors. With that being said, if one is not careful with these contracts, the HMRC which is responsible for the collection of taxes in UK. If this does happen, there is a risk that you will be charged of up to 70% penalties on unpaid taxes which is something that you can’t easily brush off once proven guilty. There are however, a number of factors that can get you less attention from HMRC with the help of an effective IR35 solution.
Getting out of the HMRC’s Attention
Prevention is always better than cure and the same can also be said with regards to the IR35. Contractors should take the necessary measures of avoiding such scenario and resolving any discrepancies as soon as possible. For that matter, it is important that you deal with your taxes in a timely manner avoiding the submission of late tax returns at all costs. Sometimes it can be pretty hard to be up to date with your taxes especially if you are doing everything on your own. If you feel that tax submission has become quite a chore or burden, you may want to consider hiring an accountant to aid you in submitting your tax paperwork. Doing so will definitely go a long way in making your tax management problems become more seamless and hassle free.
Aside from using an accountant, independent contractors today will also want to read the fine print with the contract that they are signing. Small but important details such as having your name within a contract may compromise your business relationship. Furthermore, the HMRC may also misinterpret this information as contract of service with the employer and they can use this to charge you with an IR35 fine which is something that you don’t want to happen.
Careful planning and consideration will definitely go a long way in helping you find success with regards to your business. Consider the tips mentioned in this article with regards to IR35 solutions and make sure that you are dealing with your taxes on time to avoid getting unnecessary attention from the HMRC.