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The first ever statutory change to IR35 represents a “tidying-up exercise” and should not give genuine contractors and freelancers sleepless nights, according to ClearSky Accounting.

Details of the government’s plan to strengthen the ‘disguised employment’ legislation have been published by the Treasury, along with other draft legislation for the 2013 Finance Bill.

Today’s update states that IR35 will be extended “so that it applies to office holders when they are engaged through a third-party intermediary.”

The document continues: “The extension applies both where the worker is named as an office holder of the client but paid through an intermediary, and where the intermediary (third party) is named as the office holder of the client.

“It applies in each case where the worker would be considered as an office holder of the client, if the services were provided directly under a contract between the worker and the client.

“This change equalises the tax treatment of office holders engaged through third parties with the treatment under the relevant National Insurance legislation, under which they are already in the same position as individuals who would be in an employment relationship if engaged directly.”

The draft legislation follows the recent Autumn Statement, which stated that the government would be strengthening IR35 “to put beyond doubt that it applies to office holders for tax purposes.”

Derek Kelly, managing director at limited company contractor accountants ClearSky Accounting, said: “The draft legislation serves to strengthen IR35, and reinforces the principle that someone who is part and parcel of a business will be deemed to be ‘inside’ the legislation.

“The focus on ‘office holders’, including senior post-holders such as anyone who manages a team or plays a key financial role in an organisation, follows HMRC’s announcement that it intends to step up policing of IR35.

“The danger is that the above measures could create unnecessary anxiety and confusion in the freelancing and contracting community.

”However, the fundamental fact still holds true: if you are a genuine contractor working for a range of clients through your limited company, and are not attempting to disguise employment, you have absolutely nothing to worry about.”

For a no-obligation chat with one of our IR35 experts, contact ClearSky Accounting today by calling 08000 325 326 or emailing enquiry@clearskyaccounting.co.uk.

---ENDS---

NOTES TO EDITORS

ClearSky Accounting was established in 1995 to provide no nonsense, fixed-fee accountancy and tax services for professionals and small businesses across a range of sectors.

The company employs more than 80 staff and has offices in Warrington, Cheshire and Poole, Dorset. ClearSky is a member of the Institute of Financial Accounting and was shortlisted in the mid-tier firm of the year category at the British Accountancy Awards 2012.

The company is part of the Optionis group. For more information, go to http://www.clearskyaccounting.co.uk or call 08000 325 326.

For more information, call Mike Youds, PR & social manager at ClearSky Accounting, on 01925 645259 or email mike.youds@parasolgroup.co.uk.

This press release was distributed by ResponseSource Press Release Wire on behalf of Venn Digital in the following categories: Personal Finance, Business & Finance, Construction & Property, for more information visit https://pressreleasewire.responsesource.com/about.