Services are being launched to help contractors determine their employment status as the deadline for filing self-assessment tax returns approaches, and widespread uncertainty about IR35 continues.
Freelancers Outside IR35 (FO35) provides a manual to help determine employment status, along with model contracts which are outside IR35, insurance against penalties and investigation by the Revenue, and support and representation from tax consultancy Qdos.
Shout99 managing director Andy White said that widespread uncertainty surrounding IR35 held many freelancers back from claiming that they are operating outside the tax regulations, because of fears of incurring penalties should the Revenue disagree.
"FO35 allows freelancers to make the decision about their status based on relevant information rather than fear, uncertainty and doubt," he explained.
IR35 dates back to March 1999 and treats some freelancers or contractors operating through their own limited companies as disguised employees rather than genuine businesses for tax and National Insurance purposes.
Meanwhile, financial consultancy Giant Group is warning that IT contractors who fail to hit the 31 January deadline for filing their self-assessment tax returns could unwittingly prompt a Revenue investigation into their IR35 employment status.
The Revenue warned in December that late filing of a self-assessment tax return would prompt an investigation into the individual involved.
Giant Group, which also offers an IR35 insurance service through Qdos, believes that the warning means that the pressure for contractors to hit the deadline is greater than ever before.
Matthew Brown, managing director at Giant Group, said: "It is essential that contractors act now or risk being unfairly targeted for a stressful and time-consuming enquiry."
The Revenue imposes an automatic £100 fine on anyone who misses the deadline, and a charge of up to £60 per day for a late self-assessment return.
Penalties for late filings in 2002 jumped 17 per cent over the previous year to £76.7m, according to the latest Revenue Annual Report.
"Take care when using estimates, for example of business expenses, and explain any large year-on-year changes in savings," said Brown. "Include all income sources and, most importantly, check that all your sums add up."
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