IPSE urges limited freelancers to public sector services to file invoices before March to avoid the new April tax changes

Are you a freelancer providing services to the public sector through your own limited company? Then Steven Glicher accountants have some important news to tell you about courtesy of the Association of Independent Professionals and the Self-Employed (IPSE).

The IPSE is urging freelancers who provide this sort of service to get their invoices submitted before the 6th March. Why, you’re probably wondering? Well, it believes that unless self-employers workers submit their invoices before that date, the ‘punitive’ tax changes which will be introduced at the start of the next financial year will mean that it is unlikely they will get paid before the end of this tax year.

So what tax changes is the IPSE referring to specifically? Well, from the start of the 2017/18 tax year, all payments made by public sector clients, or recruiters in contractual agreements with public sector end users, may be made via Real-Time Information (RTI): a system previously reserved just for staff.

The IPSE believes that when the new rules are applied end-users are unlikely to spend time reviewing every freelancer’s IR35 status, and will, in all likelihood, put all limited companies on RTI; effectively placing them on the company payroll.

So what has the IPSE had to say about the April tax changes? Well, a spokesperson from the organisation said:

“Evidence is already emerging that public sector clients are unwilling, or unable, to make the IR35 assessment. [So] regardless of their [freelancers’] status and without considering whether this reflects the reality of the arrangement … from 6th April, tax and NICs will be deducted at source.”

What advice is the IPSE giving to freelancers to overcome any potential problems that might emerge after April 6th? Well, IPSE chief executive, Chris Bryce, believes freelancers should think about asking for more regular payments to counterbalance the new legislation:

“Any contractors [who] invoice one month in arrears, on 30-day payment terms, will need to get their invoices issued in the first week of March, [and] any work completed during March, but paid for after the 6th of April, will be subject to the new rules,” he said.

“I’d [therefore] recommend insisting on weekly or even daily payments if you can, in order to minimise the losses you will suffer as a result of this ill-thought out legislation.”

 

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

News / Blog

14th
August

Rise in the national living wage is disproportionately affecting small businesses claims FSB

Is your small business struggling to cope with financial pressures? Is your SME being squeezed by commodity price inflation, rising…

7th
August

SMEs struggling to cope with higher business rates and levels of bad debts

How tough are small businesses findings things at the moment? Well, a new survey by Bibby Financial Services of 1,000…

31st
July

Bacs research shows late payments are costing SMEs over £2 billion a year

If you run a small business, you’ll probably already be painfully aware of the threat that late payments can pose…

31st
July

Paying voluntary NICs

There are various reasons as to why gaps may arise in an individual’s national insurance contributions (NIC) record, for example,…