Contracting Profession Gaining Momentum

The 2013 budget was in fact met with a pinch of misunderstanding, a touch of distain and a hefty dose of boredom, as the tax paying public were met with a relatively unsympathetic speech and not much to get excited about afterwards. While politicians are very much people that the public love to hate, the extreme scrutiny under which George Osborne, David Cameron and Ed Milliband were put after the event was nonetheless surprising. Thousands took to the internet, blogging and tweeting their views, from commenting on the Chancellor's budget announcements, to predicting when the Prime Minister will go bald.

Many limited company professionals had expected an update and announcement concerning 'office holders' in terms of IR35 and those who had expected further guidance in this area were left disappointed with what HMRC offered, the promised 'clarity' remaining undelivered. 'Announcements' relating to the contracting profession are usually of great importance to those in the field, the self-employed area of work being one that comes with both boundaries and limitations. In recent years, the state of contracting has seen a number of changes and alterations occur following government statements, more so than in the previous decade. From changes made to the IR35 legislation to revenue issued self-help business tests, contractors have been subjected to a great deal during the past year and a half and it isn't surprising why.
basics accounting'>basics accounting - Following the much discussed and greatly anticipated budget last month, many professionals were left confused as little appeared to have changed at the hands of the country's most powerful (besides a slight reduction of the price of beer) and contractors especially were left gnawing at their fingernails as any mention of their predicted tax status changes were brushed over in a single sentence. Any government or revenue announcements are awaited with baited breath, and with a history of nasty surprises, this year's annual budget was poised to be a belter.

So what are the reasons for this upsurge in government interest in contractors? Instead of gritty tax nonsense, the answer in fact lies with the sheer number of people entering the profession of limited company trading. As a professional route, being a contractor would have seemed highly out of the ordinary during the 90's and even throughout much of the 'noughties', but in today's society, becoming a contractor and trading through limited companies has become a prominent and competitive line of work.

As Her Majesty's Revenue and Customs never miss a trick, with a vast influx of professional tax payers leaving the PAYE system and entering contracting, their grip on limited companies has been increasingly tightening. Through the IR35 legislation, the revenue have been monitoring and investigating potential tax avoiders since the year 2000, but it has only been in recent years that an IR35 upsurge has occurred. From oil riggers to IT consultants, contractors from every profession are all at risk to HMRC's legislative regulations, and with the government interest gaining momentum (despite the recent budget) it looks as though contracting is becoming progressively more prominent.