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:
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