Employment Status

Are you a contractor? If you work for someone else, it is important to know whether you are working for that person in an employed capacity or in a self-employed capacity as an independent contractor.

Your employment status will determine the charge to tax on income from your employment or self-employment. It will also determine the class of NICs, which are to be paid.

Umbrella Companies employ you for tax purposes and complete central returns for all their contractors. It's less hassle and more flexible for you but take home pay is typically less than that the limited company option.

The best option for you depends on your plans, 'one off' contract or 'contractor for life'? [Read More...]

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IR35 and Agency Workers Regulations AWR

Guide to Agency Workers Regulations

Agency Workers Regulations (AWR) is good news for contractors

The Agency Workers Regulations (AWR) affects temporary contractors who are directly supervised by the end-client. It's likely to affect you if your contract falls within IR35.

Most contractors working through an umbrella company will be affected by AWR and also some contractors who run their own limited company. Depending on what side of the fence you are it's either good news or a pain in the neck.

Good News

AWR is good news for contractors because they get treated more fairly by their end-client. Contractors will be able to make use of the end-client's onsite facilities like the canteen.

Contractors will also be told about internal job vacancies the end-client has available. The whole premise behind AWR is to give temporary workers equal rights to full-time members of staff.

Fair's Fair

AWR doesn't make temporary contractors rights greater than a permanent member of staff's right - just equal. If the end-client has a crèche or showers or a recreational room then both contract and permanent staff will have access to them.

The underlying intention is not to give preferential treatment to contractors and the end-client will still have complete control when it comes to qualification or experience requirements and how applications are treated.

12 Week Millstone

Once a contractor hits a qualifying period of 12 calendar weeks (the same end-client, in the same role) then other rights kick-in. Equality will be assured in terms of: night work, rest periods, annual leave and paid time off for ante-natal appointments.

The qualifying period will be 're-set' as and when

  1. A new contract assignment begins for a new end-client
  2. A new assignment begins for the same client but in a new role
  3. After a break between assignments of six weeks or more

The AWR qualifying period cannot be broken by moving from one end-client site to another within the same company - unless the role is completely different.

And There's More

Pregnant temporary workers will be entitled to take paid time off for antenatal medical appointments and antenatal classes. For contractors where the original assignment cannot be completed due to Health and Safety reasons they will have to be found another assignment.

If an alternative role cannot be provided by the Employment Agency, they will have to pay the contractor at the same rate for the duration of the terminated assignment.

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HMRC Compliance

It's the basics... Compliance with Tax, VAT, PAYE and fiscal arrangements is mandatory for contractors regardless of whether you use an umbrella company or your own limited company.

Incredible then that there are still rogue umbrella companies and limited company accountants who expose their contractors to fraud. Umbrella Compare provides THE solution, we thoroughly vet all umbrella companies and limited company accountants that we list [Read more...].

Umbrella Compare provides a holistic overview of contracting with the aim of helping new and old contractors find the right payroll solutions. Contracting should be about focusing on the contract, not payroll, accounting, HMRC and bureaucracy.