Contractors risk losing IR35 benefits as compliance deadline looms

IT contractors are not ready for new business rules which will come into force on 6 April under the new Finance Law.

Contractor website ContractorCalculator surveyed 300 of its readers and found that 56% did not know what to do to keep their IR35 tax benefits.

The survey found that only 51% ran a limited company and that 29% are using composite companies.

Despite the site’s regular discussion on the issue of managed service companies and composite companies, a large number have not moved to set up a limited company, to make sure they can continue under IR35.

Dave Chaplin, CEO of ContractorCalculator, said, “April 6 is not far off. If contractors opt for a limited company - which should be the only logical choice for contractors who pass IR35 - then they should realise that setting up a company, especially a company bank account and VAT number, takes time and so they need to take action now."

Chaplin said that if contractors did not act now, they could wind up losing a sizeable percentage of income, or falling into non-compliance.

A calculator dedicated to this issue can be found at:
http://www.contractorcalculator.co.uk/Managed_Service_Compan...

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