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Specialist accountants for Limited company contractors and freelancers

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By PaperRocket Accounting, Jun 14 2018 09:07AM

Yesterday, the Supreme Court rejected an appeal from Pimlico Plumbers in relation to an earlier ruling regarding the employment status of Gary Smith.


It has been hailed by some as a landmark ruling with wide spread implications for the so-called ‘gig economy’ as well as independent contractors, but what effect will this ruling really have?



What are the key points of the case?


The whole issue began when Gary Smith, a plumber working on a self employment contract for Pimlico Plumbers, requested a reduction in his work schedule from 5 days a week to 3 after suffering a heart attack. His request was denied and he was subsequently dismissed.


Back in 2011, Mr Smith brought claims against Pimlico for disability discrimination and basic workers rights, claiming that he was engaged as a ‘worker’, rather than self employed. A tribunal ruled in Mr Smith’s favour. Despite having worked solely for Pimlico for 6 years, and being VAT registered and paying self employed tax, the court ruled that he was indeed entitled to workers’ rights.


However, Pimlico argued that Mr Smith was indeed an independent contractor and launched an appeal into the tribunal ruling. Yesterday, the Court of Appeal ruled that he was indeed a worker based on the fact that he was not allowed to provide a substitute, he had a lack of control over the way in which he performed his work and he was contractually obliged to do a minimum number of hours per week. As a worker, Mr Smith would be entitled to employment rights, such as holiday and sick pay.



What the ruling means for freelancers and contractors


Pimlico Plumbers CEO Charlie Mullins warned that other companies using self-employed contractors may face a “tsumani of claims” as a result of this ruling, and that this was an “exploitation” by a highly-paid, highly-skilled man who used a loophole in current employment law to set himself up for a double pay-day.” It is likely that this ruling will have an impact on both the Uber, and CitySprint cases which are due to be appealed later this year. At the very least, it may well encourage other ‘self employer’ contractors to challenge their own legal status.


More significantly for contractors, it is the latest in a line of tribunal cases which have reaffirmed the problems with HMRC’s interpretation of mutuality of obligations (MOO) and it’s CEST tool, which has been outed as ignoring MOO. As part of this ruling, the Supreme Court looked in depth at the mutuality of obligation and in making their ruling, stated that although Pimlico had no obligation to provide Smith with work on days where there was none available, “it would seem hard to understand why, in the normal course of events, Pimlico would not be content to be obliged to offer work to him”. Surely if the courts are placing such emphasis on MOO, this should be factored into HMRC’s own IR35 determination tool?



PaperRocket Accounting provide accounting and tax services to professional limited company contractors and freelancers working in the UK.


We offer our clients a choice of four all-inclusive fixed fee monthly packages which cover all of their accounting and tax needs (so no hidden costs or surprise bills!). All of our accounting packages include a monthly subscription for a cloud accounting software subscription provided by the awarding winning FreeAgent.


Each of our clients is given their own dedicated qualified accountant with unlimited access in person, telephone, or by email.


We pride ourselves on our client satisfaction and customer service and were shortlisted as 'Welwyn Hatfield Business of the Year 2018' in the SME Hertfordshire awards, 'Small Practice of the Year 2016' in the AccountingWEB practice excellence awards, as well as FSB Hertfordshire Service Excellence finalists in 2015 and 2016.


To find out how we can help you please get in touch now.


By PaperRocket Accounting, Jun 8 2018 08:50AM

We are very excited to share that our senior accountant, Nikki Norman, has won the ‘AAT Professional Member of the Year (MAAT) 2018’!


After being shortlisted in May, last night, at a packed out awards ceremony in Windsor, Nikki was crowned overall winner in her category, beating off stiff competition.


After being presented with her trophy, Nikki said ‘I am extremely excited and honoured to have won this award. Joining PaperRocket was the best decision I ever made and this award is a testament to the hard work I have put into my new role’.


Sarah Solo, Director of PaperRocket added, 'We are so incredibly proud of Nikki and what she has achieved. Winning such a prestigious award is an incredible honour and she is an amazing asset to the PaperRocket team. I am sure her clients will be feeling very lucky today to be working with such a brilliant award winning accountant'.


Well done Nikki!



PaperRocket Accounting provide accounting and tax services to professional limited company contractors and freelancers working in the UK.


We offer our clients a choice of four all-inclusive fixed fee monthly packages which cover all of their accounting and tax needs (so no hidden costs or surprise bills!). All of our accounting packages include a monthly subscription for a cloud accounting software subscription provided by the awarding winning FreeAgent.


Each of our clients is given their own dedicated qualified accountant with unlimited access in person, telephone, or by email.


We pride ourselves on our client satisfaction and customer service and were shortlisted as 'Welwyn Hatfield Business of the Year 2018' in the SME Hertfordshire awards, 'Small Practice of the Year 2016' in the AccountingWEB practice excellence awards, as well as FSB Hertfordshire Service Excellence finalists in 2015 and 2016.


To find out how we can help you please get in touch now.




By PaperRocket Accounting, Jun 4 2018 12:48PM

For children across the land, it’s currently the last half term before the final stretch to the summer holidays. And whilst that will have the kids jumping for joy, it may also have working parents tearing their hair out about what they are going to do with the little darlings for 6 long weeks… and how they’re going to fund it!


Well, another great thing about having a limited company is the ability to expense some of your childcare costs. Currently, there are two ways of contributing to childcare costs from your company, via a voucher scheme or a direct agreement with a childcare scheme provider.



Voucher scheme


The first thing to note is that from 5th October 2018, no new applications to this scheme will be accepted, and instead, you will need to apply to a new ‘tax free childcare’ scheme (where (provided neither you nor your partner earns more than £100,000/year) the government will pay £2 for every £8 you pay to a childcare provider via your online account up to a maximum of £2,000/year). However, anyone already a member can still use the current voucher scheme for as long as your employer runs the scheme and you remain their employee.


With this scheme, vouchers are paid to employees which would then be used to pay for childcare. Your childcare provider will claim back their fees and there will be an admin fee from the company who issues the vouchers.



Direct agreement


With this option, the employer will pay a provider for childcare costs on behalf of the employee. The amount paid will be set out in an agreement between the employer and employee.



How much can be paid


If you joined your company’s childcare scheme before 6th April 2011, the company can pay £55/week or £243/month which will be exempt from tax or NI contributions. Anyone joining after that date will need to have a basic earnings assessment conducted to calculate how much they will be entitled to receive tax/NI free.



Who qualifies for a childcare scheme


To qualify for either of the above schemes, the following criteria needs to be met:


• The childcare provider must be Offsted registered.

• You must have parental responsibility for the child you are claiming childcare for.

• Any payments outside the scheme, or above the exempt allowance won’t qualify for tax/NI exemption.

• You can claim for children up to 15, or 16 if they are registered disabled.



Therefore, if you are a director of and employed by your own limited company, and your childcare meets the criteria above, putting these childcare costs through your limited company is a great way to help with both your childcare costs, and also to help reduce your company corporation tax as this type of expense attracts corporation tax relief. And with that (what sometimes feels like) never-ending Summer holiday coming up, this could be music to your ears!



PaperRocket Accounting provide accounting and tax services to professional limited company contractors and freelancers working in the UK.


We offer our clients a choice of four all-inclusive fixed fee monthly packages which cover all of their accounting and tax needs (so no hidden costs or surprise bills!). All of our accounting packages include a monthly subscription for a cloud accounting software subscription provided by the awarding winning FreeAgent.


Each of our clients is given their own dedicated qualified accountant with unlimited access in person, telephone, or by email.


We pride ourselves on our client satisfaction and customer service and were shortlisted as 'Welwyn Hatfield Business of the Year 2018' in the SME Hertfordshire awards, 'Small Practice of the Year 2016' in the AccountingWEB practice excellence awards, as well as FSB Hertfordshire Service Excellence finalists in 2015 and 2016.


To find out how we can help you please get in touch now.


By PaperRocket Accounting, May 25 2018 05:37PM

We are very excited to announce that PaperRocket Accounting has been shortlisted as ‘Welwyn Hatfield Business of the Year’ and 'Employer of the Year' in the SME Hertfordshire Business Awards!


The SME Hertfordshire Business Awards recognise hard-work, determination and enterprise across a variety of different types of businesses in Hertfordshire, and it is an incredible honour to be shortlisted for the second time (we were previously also shortlisted in 2016) for such a prestigious award.


Sarah Solo, director of PaperRocket Accounting says ‘We have had a fantastic year at PaperRocket and being shortlisted for two awards is a testament to the dedication and hard work of everyone who works here. We are thrilled to be shortlisted’.


The grand final will be held on the 26th July- wish us luck!



PaperRocket Accounting provide accounting and tax services to professional limited company contractors and freelancers working in the UK.


We offer our clients a choice of four all-inclusive fixed fee monthly packages which cover all of their accounting and tax needs (so no hidden costs or surprise bills!). All of our accounting packages include a monthly subscription for a cloud accounting software subscription provided by the awarding winning FreeAgent.


Each of our clients is given their own dedicated qualified accountant with unlimited access in person, telephone, or by email.


We pride ourselves on our client satisfaction and customer service and were shortlisted as 'Welwyn Hatfield Business of the Year 2018' in the SME Hertfordshire awards, 'Small Practice of the Year 2016' in the AccountingWEB practice excellence awards, as well as FSB Hertfordshire Service Excellence finalists in 2015 and 2016.


To find out how we can help you please get in touch now.





By PaperRocket Accounting, May 21 2018 10:14AM

At the moment, it seems like every other day there’s a new story about IR35 in the news. Over the past few months, we have seen IR35 related headlines dominated by stories about the BBC allegedly ‘forcing’ talent to use PSCs, which has then resulted in various BBC presenters (including presenter Christa Ackroyd) being ordered to pay HMRC thousands in tax and NI, after being deemed to be inside IR35.


And of course, the dreaded IR35 reforms that were teased in the Autumn Budget aren’t far from the minds of anyone contracting through a limited company. In fact, last Friday, HMRC finally announced the consultation on IR35 that had been promised in the November budget.



IR35 consultation for 'off-payroll' working in the private sector launched


On Friday, HMRC announced that they were launching a new consultation ‘to make sure that people who effectively work as employees pay the right amount of tax’. They state that they are ‘seeking views on the best way to tackle non-compliance with the off-payroll working rules (IR35) in the private sector’.


As we discussed in a previous blog, it was always a matter of when this consultation was launched, not if. Unfortunately, it looks as though HMRC have not learnt anything from the chaos that the reforms caused in the public sector, instead stating that ‘external research on initial implementation shows that the reform has had relatively little impact… in the public sector’.


The full consultation document can be found here as well as ways to respond with your own opinions and suggestions on this subject. The consultation closes on 10th August 2018, so we would certainly urge anyone working in the private sector who will be affected by this reform to read through the documentation and contact HMRC with any objections you may have.



IT Contractor Jensal Software Ltd wins IR35 case against HMRC


However, from an IR35 perspective, it’s not all bad news. Ian Wells, director of Jensal Software Ltd, has won his appeal against HMRC over a £27,000 tax bill imposed in the name of IR35. Conversely, this is the second time that Mr Wells has not only faced an IR35 investigation, but also won it! And even more shockingly, this latest case saw one government department (HMRC) go up against another (the DWP- the client that Mr Wells was contracting for)!


Judge Jennifer Dean who ruled in favour of the contractor in this case stated “Although there is mutuality of obligation it does not extend beyond the irreducible minimum, nor does it demonstrate that the relationship was one of a contract of employment. Moreover, the level of control falls far below the sufficient degree required to demonstrate a contract of service”.


Andy Vessey, who defended Mr Wells made the valid point that the ruling in this case “certainly casts doubts over HMRC’s interpretation of IR35, and their perception of compliance in the public sector. Questions will certainly be asked about their rhetoric around non-compliance, with further scrutiny on the accuracy of their CEST tool.”



PaperRocket Accounting provide accounting and tax services to professional limited company contractors and freelancers working in the UK.


We offer our clients a choice of four all-inclusive fixed fee monthly packages which cover all of their accounting and tax needs (so no hidden costs or surprise bills!). All of our accounting packages include a monthly subscription for a cloud accounting software subscription provided by the awarding winning FreeAgent.


Each of our clients is given their own dedicated qualified accountant with unlimited access in person, telephone, or by email.


We pride ourselves on our client satisfaction and customer service and were shortlisted as 'Small Practice of the Year 2016' in the AccountingWEB practice excellence awards, as well as FSB Hertfordshire Service Excellence finalists in 2015 and 2016.


To find out how we can help you please get in touch now.



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