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SMCC Umbrella Companies v Ltd Company

SMCC Umbrella Companies v Ltd Company

SMCC Umbrella Companies v Ltd Company

Contractors, consultants and freelancers who don’t want to get bogged down in paperwork, tax legislation, or are contracting for a period of less than 3 months are more than likely to fall outside the IR35 legislation and choose to contract via an umbrella company. There are pros and cons to either working with an Umbrella company rather than setting up your own limited company. The barrier to most consultants, contractors and freelancers is the cost of setting up and running your own Limited Company.

 

Advantages of having a Limited Company Advantages of using an HMRC compliant Umbrella Company
·Limited company contractors typically take a small salary which minimises PAYE and NIC liabilities and withdraw the remainder of their income as dividends.

· Could benefit from joining the flat rate VAT scheme using the 5% expenses allowance.

· Provides a ‘professional’ image of your business.

· As a Company Director your personal liability is limited unless you are asked to personally guarantee a bank loan to the company.

· As a Company Director, you are in complete control of all company affairs, both financial and administrative.

· You can create different share classes, which can be useful for tax-planning purposes.

· Company Directors control the way they remunerate themselves and can choose the optimum split between salary and dividends

· Your Limited Company can be sold easily and potentially benefit  from the Entrepreneurs’ Relief scheme, paying 10% in CGT on share sale proceeds if you have owned the shares for a year or more.

 

 · You become an employee of the umbrella company and submit timesheets and expenses to the umbrella company who will in turn invoice the end client.

· You are paid by the umbrella company as their PAYE employee – less their fee, tax and NI so you do not require an accountant.

· They offer the perfect solution for those who are unsure about contracting or are simply contracting as an ‘in between’ job as there is minimum input required.

· Less administration and costs associated with running a company, such as company filing fees, accountancy costs, stationery, and one-off legal and administration costs.

· Offer a peace of mind and advice as part of their service (which is paid for as in your fees)

· Preferred option for short term contracts

· No upfront fees or annual fees t budget for.

· Offer weekly or monthly payment options where available

· Will help you identify your IR35 status

 

Please be aware that some accountancy firms estimate that between 80% to 95% of take-home pay for consultants is not tax-compliant! There certainly does not appear to enough to warn consultant and contractor taxpayers of the dangers of ‘rogue’ umbrella companies. The general feeling is that the current guidance from the HMRC doesn’t go far enough or is clear enough with regard to Umbrella companies and most contractors, freelancers and consultants who see their Umbrella Company would never expect a high tax bill or refund at a later a date or know how to challenge a decision. However, HMRC is more than happy to retrospectively tax and fine anyone caught using a scheme as the contractor, consultant or freelancer without a Limited company is responsible for their tax affairs. Ignorance is not a defence, but taxation is a complicated business built on a shifting sandbank of rules and regulations.

Scott Merrick Contractor Consulting (SMCC) ensure you don’t become an accidental tax avoidance target for HMRC or fall foul of IR35 legislation changes which come into effect in 2019. We help identify IR35 status and advise employers and consultants of the best route to take tom minimise risk and liability.

As an experienced specialist contractor consultancy, SMCC take care of the crucial gap in expertise and knowledge relating to the legal requirements of recruiting and paying contractors, managing all aspects of the process between contractor and client to protect both parties through screening, running checks, payments, invoicing & drafting contracts, to ensure that all legal obligations are met.

SMCC sit down with our clients and listen to their needs before offering tailored contract and payment solutions. We want the best for our clients and our business has grown as we manage any concerns out of utilising skilled contractors. We work with in-house HR, Risk & Compliance teams to achieve minimum disruption, streamline payments and invoicing to retain key contractors.

SMCC Umbrella Companies v Ltd Company

Although there are few concrete details showing how the IR35 reform will impact the private sector, lessons from public sector IR35 reform could help your business stay one step ahead and give you time to adapt you on boarding and payroll strategy. If you are in any doubt about your next steps please contact SMCC by calling 01277 211151, contact us via our contact enquiry form or by email info@smcc.uk.com

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How has IR35 changed your management of specialist contractors

How has IR35 changed your management of specialist contractors?

Most companies and HR departments are geared up for the  in-house recruitment of permanent or temporary staff. The company onboarding, and payroll process is designed with their needs in mind with allocated salary ranges, monthly payment dates, hours, holiday, sick pay, scaled tax and National Insurance payments etc. Full time employees may also receive additional benefits such as company laptops, phones and cars, maternity and paternity leave, pensions as well as paid sabbaticals.

IR35 was introduced in April 2000 to counter the avoidance of employed levels of tax and national insurance by individuals providing their services through intermediaries, such as Limited companies and umbrella companies collectively known as a personal service company (PSC).   In April 2017 legislation was revised to move the responsibility and liabilities for IR35 status within the public sector from contractors to employers. The private sector is now getting nervous about the constantly shifting employment legislation with regard to consultants.

As off-payroll worker they are currently paid through their own PSC who pay Income Tax and National Insurance contributions (NICs). The client company pays the PSC for the contractors work without deducting income tax or National Insurance contributions (NICs) under PAYE. There are several potential tax advantages to this type of arrangement:

  • Wider range of expenses against taxable profits than that allowed an employee to set against his taxable income.
  • Cashflow benefit in avoiding tax being deducted at source each month.
  • The consultant may be in a position to receive dividends as an alternative to only being paid a salary, an arrangement which is likely to mitigate their liability to NICs.

In the private sector, there is currently no tax liability for the hiring company, where the contractor provides services via their own limited company or PSC. If they are deemed ‘inside’ IR35 and HMRC declares that it’s an employment relationship, then tax and National Insurance will be deducted from their earnings and the liability for any missing tax lies with them.

With more IR35 changes expected to be rolled out to the private sector in 2019, it’s going to be an increasingly contentious area that companies, and HR departments will need to keep a close eye on. Compliance requirements require companies to have robust employee onboarding systems in place to properly manage contracts and ensure informational clarity.

As an experienced specialist contractor consultancy, SMCC take care of the crucial gap in expertise and knowledge relating to the legal requirements of recruiting. onboarding and paying contractors, managing all aspects of the process between contractor and client to protect both parties through screening, running checks, payments, invoicing and drafting contracts, to ensure that all legal obligations are met.

SMCC use digital methods of managing onboarding providing companies with significant advantages and a complete digital log of all documents that are exchanged with any new hires including contractors. Our contract templates automatically adjusted to match the job role, providing companies with the tools to ensure the status of each contractor, consultant and freelancer is clearly defined and documented. Outsourcing provides a smarter way to onboard new employees into your business – reducing admin time, boosting efficiency and improving contractor/consultant engagement. We ensure integration points between the outsourced processes and the retained payroll processes are cost and time inefficient.

SMCC understand that onboarding, contracts and payroll are highly administrative functions which can be outsourced easily. When outsourcing or reviewing an existing payroll outsourcing contract, cost efficiency of payroll integration points, quality of service and risk SLAs are all considered to ensure best value for money.

With accountancy firms estimating that between 80% to 95% of take-home pay for consultants is not tax-compliant and HMRC is more than happy to retrospectively tax and fine contractors if they fall outside IR35, we ensure your consultants and company don’t become an accidental tax avoidance target for HMRC. We help identify IR35 status and advise employers and consultants of the best route to take to minimise risk and liability by sitting down with our clients and listening to their needs before offering tailored contract and payment solutions. We want the best for our clients and our business has grown as we manage any concerns out of utilising skilled contractors. We work with in-house HR, Finance, Risk & Compliance departments to achieve minimum disruption, streamline payments and invoicing to retain key contractors.

To see how has IR35 changed your management of specialist contractors contact us today or visit our services page to see how we can help your business.

Although there are few concrete details showing how the new IR35 reform will impact the private sector, SMCC has the experience and access to the legal expertise to fit seamlessly as an extension of your corporate arm to provide a faultless service to contractors and peace of mind to the companies hiring them. If you are in any doubt about your next steps please contact SMCC by calling 01277 211151 or by email info@smcc.uk.com

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Contracting Market Specialist Essex

Contracting Market Specialist Essex

Contracting Market Specialist

Are you looking for a Contracting Market Specialist Essex?

If you are currently employing contractors, freelancers or consultants you need a contracting market specialist. Scott Merrick Contractor Consulting (SMCC) is a specialist in providing contracting market management, staffing and payroll solutions. We specialise in IR35 off payroll contracting and work hard to be HMRC compliant. As contract market specialist, we provide a protective link between your company and contractors to ensure limited exposure to changing HMRC regulations.

The contracting market became very confusing when IR35 came into effect and as a contracting market specialist we understand and remain up to date with how legislation effects contractors and companies. Many companies recognised the increased risk and responsibility involved in onboarding contractors with HR, risk and compliance departments unsure as what to do with them. As an experienced contracting market specialist, we understand the value of an ‘IR35 friendly’ contract which clearly sets out the business-to-business nature of the arrangement and include specific clauses that demonstrate IR35 compliance, such as a good strong substitution clause.

SMCC specialise in partnering with companies which use consultants who require a contracting market specialist.  We operate within your company payment cycles, while ensuring that all contractors are paid quickly and consistently.  All payments, invoices and timesheets are managed by our online portal, streamlining the process, taking less of your time and ensuring transparency.

SMCC are a specialist in providing contracting market solutions and can act as your off payroll partner and find the most tax efficient way of hiring a contractor. We enable you to bring in key contractors quickly and efficiently while providing you the security and peace of mind needed in line with the latest IR35, HMRC, and industry guidelines regarding relationships and payments to contractors.

Why Choose SMCC as your Contracting Market Specialist Essex

  • We provide the best contracts to both client & contractors, they are succinct, easy-to-understand and in line with changing HMRC and industry legislation requirements, providing companies the required protection they need and giving contractors the best options for their own limited or umbrella company and making them as IR35 friendly that is possible.
  • SMCC work to flat fee, a 5% margin for the length of the We take away in-house staffing costs to manage the contractor onboarding process for you, provide the legal contracts & administration that you require as well as dealing with any questions. We can also manage pre-screening checks such as DBS and financial screening, if you require.

As your contracting market specialist Essex SMCC keep in regular contact with both you and the contractor and provide tailored data during the duration of the contract to ensure you are both happy. If things should go wrong, SMCC can step in to ensue to resolve problems or tensions. If you need a contracting market specialist Essex contact SMCC by calling 01277 211151 or by email info@smcc.uk.com

Want to know the future of IR35? Visit our blog for more details.

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HMRC Compliant Payroll Specialist Essex

HMRC Compliant Payroll Specialist Essex

HMRC Compliant Payroll Specialist Essex

Are you looking for an HMRC Compliant Payroll specialist Essex?

Scott Merrick Contractor Consulting (SMCC) are an HMRC compliant payroll specialist Essex with a  wealth of experience in partnering with companies of any size to ensure they get the best consultants onboarded quickly and efficiently. We understand the importance of providing companies with a straightforward process providing the best, most tax efficient, IR35-friendly, HRMC compliant payroll solutions.

SMCC provide an online contracts service that is second-to-none. We have the best legal advice available for any questions you may have, to give you that peace of mind and assurance that you are working within the latest HMRC and recruitment regulations. We are a ‘hands-on’ company who have many years’ experience helping contractors secure their next assignment and ensuring companies have an HMRC compliant payroll specialist on hand. We enjoy interacting personally with everyone to provide a specialist service that cares for your individual circumstances.

Some accountancy firms estimate that between 80% to 95% of take-home pay for consultants is not HMRC compliant! Many company HR and Risk and Compliance departments struggle to find enough clear information to confidently navigate through the confusing world of HMRC, tax and payroll compliance. Many companies are understandably nervous of ‘rogue’ umbrella companies which are not always HMRC compliant. Both the company and contractor using an umbrella companywould never expect a high tax bill or refund at a later a date or know how to challenge a decision as HMRC are more than happy to retrospectively tax and fine anyone caught out. Every contractor, consultant or freelancer with or without a limited company is responsible for their tax affairs. Ignorance is not a defence, but taxation is a complicated business built on a shifting sandbank of rules and regulations.

As a HMRC compliant payroll specialist Essex, SMCC ensure you don’t become an accidental tax avoidance target for HMRC or fall foul of IR35 legislation changes which come into effect in 2019. We help identify IR35 status and advise employers and consultants of the best route to take to minimise risk and liability and ensure HMRC compliance. We want the best for our clients and our business has grown as we manage any concerns regarding hiring skilled consultants on a contract basis.  We work with in-house teams to achieve minimum disruption, streamline consultant payments and invoicing to enable you to retain key contractors. If you need a HMRC compliant payroll specialist, please  contact SMCC by calling 01277 211151 or by email. mailto:info@smcc.uk.com

Want to know the future of IR35? Visit our blog for more details.

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Payroll Management Partner Essex

Payroll Management Partner Essex

Payroll Management Partner Essex

Are you looking for a Payroll Management Partner in Essex?

Scott Merrick Contractor Consulting (SMCC) are based in Essex and can act as your payroll management partner offering compliance driven contractor management solutions. If you are a company struggling to understand your legislative commitments with regard to onboarding or paying contractors, we can help.

SMCC provide a comprehensive payroll management partner service for your contracting needs whether you are based in Essex or not. We partner with you to save your company money and time by taking care of all matters relating to key contractors you need on-board quickly and efficiently acting as the conduit between your company and contractor.

As your payroll management partner, SMCC run pre-employment screening checks, manage on-boarding, timesheets, billing and payroll. Companies can benefit from our end-to-end management of contract workers, employment and off-payroll solutions. In light of recent and forthcoming legislative changes from HMRC with regard to the relationship and payroll management of contractors many companies are understandably nervous about hiring and paying contractors. We understand that HR, as well as Risk and Compliance departments are particularly concerned as it is those departments who are responsible for the payroll and management of consultants. Payroll management has witnessed the repercussions of disruptive changes from contractor workforce legislation.

Why do you need a Payroll Management Partner?

SMCC are experienced in working as a payroll management partner and have a thorough understanding of company and HMRC commitments. We simplify the onboarding process and payroll options with scalable and flexible solutions that cover end-to-end contractor payroll for companies of all sizes. As your  payroll management partner SMCC will look after you from liaising with a contractor, collating important data to produce their respective contracts efficiently, keeping them happy and giving you the confidence that you are securing the best people for your business. Once on-boarded into your company, SMCC keep in regular contact with both you and the contractor and we can provide tailored data including regular financial information, HMRC reporting and feedback from the contractors to make sure they are happy and are achieving what is required. We even take care of any payroll management disputes and breach of contract issues should things take a turn for the worse.

As your payroll management partner, we want the best for our clients and our business has grown as we manage any concerns regarding hiring skilled consultants on a contract basis.  We work with in-house HR and compliance departments to achieve minimum disruption, streamline consultant payments and invoicing to enable you to retain key contractors. If you need a payroll management partner in Essex please  contact SMCC by calling 01277 211151 or by email. mailto:info@smcc.uk.com

Want to know the future of IR35? Visit our blog for more details.

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Payroll Management Partner EssexPayroll Management Partner EssexPayroll Management Partner Essex