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Freelancers – important news you need to know
There’s been a lot of talk and confusion over the last 2 months with regards to how you work as a freelancer, your tax liaibility and your status in general within the working marketplace. We’ve monitored this closely so that we can help you keep you updated as best we can. Here’s the latest you need to know, directly from our tax advisors and how we can help you too.
Since 6th April 2007, the Inland Revenue has made some important changes to the way you can operate as a freelancer, affecting both you and ourselves as a recruitment business. In short, we’ve been advised that we and our clients can no longer legally work with individuals who operate through an ‘MSC’ or Managed Service Company, or with those of you who are still effectively under the banner of ‘self employed’.
The good news is that you can work normally and flexibly if you are:
- a Limited Company operating within IR35
- operating through an Umbrella Company
- on a payroll, be it the client or through Gabriele Skelton
How can we help you?
Many of our freelancers don’t want to go through the hassle of setting up a Limited Company and the Inland Revenue has ensured there are no tax advantages of operating through a Limited Company as you must apply the IR35 rules. Many freelancers are choosing to operate through an Umbrella Company because it’s simple, easy and the client prefers it too because it’s fully tax compliant. We recommend Blue Intellect because we’ve worked with them for the past 2 years and they are simple and effective. Here’s how it works, if you’re interested in joining them.
- Blue Intellect is a simple, very effective umbrella company which you join as a ‘member’
- You don’t have to go through the hassle and expense of setting up a Limited Company and getting a business bank account, registering for PAYE and VAT, or dealing with the paperwork and getting tax advice
- You will remain self employed
- You will be paid a deemed salary under the IR35 rules and tax and national insurance will be deducted on a 4 weekly basis for you
- You can work at any agency via any recruiter, not just Gabriele Skelton, therefore giving you total flexibility but the stability of being paid by one company, Blue Intellect
- You will never have to send an invoice again or chase for payment. All you have to ensure is that you submit your approved timesheets online or via email once a week
- You will be paid every 4 weeks as we pay Blue Intellect every 4 weeks
- You will benefit from an automatic 5% tax allowance to cover your business expenses, and therefore do NOT have to retain receipts – easy!
- Blue Intellect will deduct tax and national insurance due on your behalf every 4 weeks, ensuring you get no nasty surprises at the end of the tax year
The charge for this simple and very effective service is 2% every 4 weeks of your earnings but never greater than £60 – probably one of the most competitive offers from an umbrella company on the market. It’s also therefore cheaper than employing an accountant and you don’t have to do any year end accounts and Blue Intellect will prepare your partnership self assessment tax return for you.
For any further advice on your ‘freelance status’, please contact Karina at karina@gabrieleskelton.com or Lisa at lisa@gabrieleskelton.com
