The First IR35 Letters Have Been Sent Out to IT Contractors

HMRC and the Government have taken the first steps in their campaign to bring in much more money from contractors with the sending out of the first batch of letters to contractors asking them to sit the IR35 Test and to prove that they are outside IR35.

A Review Panel of IR35 set up by the Government to look at IR35 again, recommended that IR35 should not be abolished, with one of the main reasons being that many contractors would leave their Umbrella Companies and go back into Personal Service Companies which was seen as a bad thing as the Government and HMRC get an average of around £10,000 a year less in tax and National Insurance contributions from contractors in Personal Service Companies compared to those in an Umbrella Company.

Indeed, the Government went further and said in the last Budget that they would ‘strengthen IR35’.

To this end, they set up three new Compliance Teams based in Salford, Croydon and Edinburgh and hired a total of 36 Compliance Officers for the new teams while they are cutting back Government staff elsewhere. It looks as if the Government see contractors as a means of increasing the tax take and see the IR35 tax as a means of doing so. IR35 was set up in 1999 to catch ‘disguised employees’, i.e. because of the spate of companies laying off employees on a Friday and starting them again in the Monday as contractors doing exactly the same job but providing tax advantages for both the company and the new ‘contractor’.

However, it caught many genuine contractors in its net.

Now it looks as if the Government are going to use this IR35 legislation to increase their tax take by classifying many genuine contractors as ‘disguised employees’ and forcing them to pay more tax. To this end they have, with the help of the Professional Contractors Group, devised a new IR35 Business Entity Test that contractors can take online to see if they are at high, medium or low risk of being caught by IR35.

Although the test is not definitive it appears to place virtually all contractors as being of high risk of being inside IR35. Although HMRC devised the test with the PCG, it was HMRC who devised the scoring system alone which appears to show most contractors to be at high risk.Now, the new Compliance Teams have sent out their first letters to contractors who use Personal Service Companies asking them to sit the test online and also asking them to send evidence to prove that they are at low risk of being caught by IR35.

If they can do that then they will not be investigated for a further 3 years but if they cannot, or they don’t reply (and they have only been given a month to reply), then the next step is likely to be a visit from the Compliance Team. If it is found that the contractor is inside of IR35 then this could result in the contractor having to pay tens of thousands of back tax. The end game here appears to be to scare contractors into getting out of Personal Service Companies and joining Umbrella Companies.

Do the maths.

There are currently 200,000 contractors using the Umbrella Company route and each of them pays £10,000 a year extra to HMRC and the Government. That’s £2bn extra a year that the Government didn’t get prior to 1999 when IR35 came in. According to the PCG there are 1.6m freelancers in the UK, most of whom would fail HMRC’s current IR35 Business entity Tests.That’s a very tempting sector for the Government and it doesn’t need any change in the legislation.Their main aim is not to catch contractors but to get high profile publicity in order to scare tens of thousands of contractors to take the Umbrella Company route rather than the Personal Service Company route.

Gerry McLaughlin is the CEO of UK IT Contractor umbrella company website www.ITContractor.com.

Dealing with Agencies – Getting the Best Rate Possible

Contractors are often duped by wily agencies and need to know what to look out for when dealing with agencies.

They can chose their Umbrella Company and their Contractor Mortgage company but they can seldom choose their agent as they tend to have to take whatever opening comes up from whatever agency have the requirement .

The biggest mistake that contractors make is in that the agency that they deal with is ‘their agent’. They imagine that they are like agents for actors who normally take 10% of what they can get from a client and so are motivated to get as much as they can for the actors that they serve.However, it is very different in the contractor / agent relationship. Indeed it is only contractors who call them agents as they tend to call themselves recruitment consultants.

Contractors in Umbrella Companies are sometimes better protected as they can ask the advice of their Umbrella Company on rates whereas Limited Company contractors are very much on their own when negotiating.Indeed, some Umbrella Companies may have relationships with particular agencies and may insist that their contractors get a certain percentage of the rate that the agency gets from the agency.

The first duty of recruitment consultants or agents is to maximise the returns for themselves and for their agencies. This is often to the detriment of contractors.As there is usually no set percentage of what the client will pay that should go to contractors and what should go to the agency, the agency will try and take as big a percentage as they can.

Contractors, especially new contractors, often find out that the agency is taking 50% or more of everything that they earn.Agents work on commission – so the less the contractor gets the better for them. Indeed, agents work on ascending scales of commission. In other words, if they hit certain targets then they might get 10% of what the agency gets. If they hit higher targets then they may make 20% or 30% or even 50% of what the agency gets.

Therefore it is in their interests to take as much as they can of what the client is paying and to leave the contractor with as little as possible of what the client will pay.Of course, more experienced contractors will be wise to this. However, agents, who are doing this kind of thing on a daily basis, are better attuned to this ‘game’ than the contractors, who only negotiate every few months at the most.

Most contractors make the mistake of looking at recruitment consultants as ‘their agents’ and let the agency tell contractors what their rate is going to be especially in their first few contracts. However, once they realise that the agency is a competitor for the money that the client will pay then their attitude changes and the contractor tries to dictate more the amount of money that goes to them from the client rather than the agency.

This advice may help new contractors to avoid this mistake and maximise their own returns from the work they do.

Gerry McLaughlin is the CEO of UK IT Contractor umbrella company website www.ITContractor.com.

5 Reasons For Contractors to Choose an Umbrella Company

Contractors normally operate in one of two ways, either by using a Limited Company or by being part of a Contractor Umbrella Company.

Here are reasons for a freelancer to operate using an Umbrella Company

1. The Contractor is caught by IR35.

If a contractor is caught by IR35 he or she is best served by being inside an Umbrella Company as they can claim a limited amount of expenses which they wouldn’t be allowed to do if they simply paid the IR35 tax.

2. The Contractor is not sure if he or she is caught by IR35

The taxman decides on a contract by contract basis whether a contractor is inside or outside of IR35. This means that the contractor may be inside for one contract and outside for the next contract. In this situation the contractor may want to operate through an Umbrella Company just to be on the safe side.

3. The Contractor wants to concentrate on Contracting

Umbrella Companies treat contractors as employees who can claim certain expenses. Many contractors don’t want to handle their own VAT and book keeping and are happy to pay someone else to take this responsibility off their hands so that they can concentrate on what they do best and that is contracting.

4. The Contractor doesn’t want years of an IR35 Tax Investigation

Many contractors who operate through Limited Companies have spent years under investigation for IR35 tax from HMRC. Many of them are then found to be outside IR35 but have wasted a lot of time and energy as well as worry in doing it. Others have been found to be inside of IR35 and have had to pay several years of back tax, interest and penalties sometimes amount to over £100,000. Many contractors don’t want the worry of having an IR35 tax investigation hanging over them

5. The Contractor can claim Expenses

Although the contractor can’t claim as many expenses as they would do if inside a Personal Service Company they can still claim a limited amount of expenses, for example, they can claim travel expenses, overnight expenses if they are staying away, pensions, memberships of professional organisations and contributions to charities which are all tax deductible.

It is every contractor’s choice depending on the way they operate. Are they ‘disguised employees’ or are they genuinely in business on their own account?

Do they want to manage their own affairs or do they want to concentrate on contracting and leave the admin to others?

Gerry McLaughlin is the CEO of UK IT Contractor umbrella companies website www.ITContractor.com.

Website For a Cause

In today’s global market, almost every company, organization, institution, etc needs its own website to ensure efficient marketing. It is important for them to have a reliable web presence. They are spending good amount of cash to get high-end websites. Every organisation spends according to its budget. The bigger enterprises hire web design companies and spend thousands of dollars on website. The small and medium enterprises look for cheaper services. In this picture, the nonprofit organizations are the most worried ones. They are short of budget and cannot spend on a very high-end website from a professional web design company.

A nonprofit company can hire a web designer at low cost or may design the website itself. The important thing that it must ensure is the presence of high-quality information in its website. Let us look at some recommendations for nonprofit organizations.

State the purpose clearly

Most of the nonprofit companies or NGOs work to raise charities, funds, donations for the helpless people. Whether you group helps the poor, children, blinds, handicapped or any one in need, you should state the goals of the company in your website.Web Design Delhi The visitors should get a clear idea of the motives and goals of the whole project. The content of the website should contain enough information about the people you are helping, their requirements, locations, age group, etc. This will make the visitors know the purpose of the website.

Company background

Never forget to provide information about your organisation. Today, there are many frauds, live on the internet asking donations in name of poor and the helpless. Many kind personalities fall prey to them and donate huge amounts. Give in the full details of your company, registration ids and numbers, office addresses, phone numbers, etc. You can also list the names and details of the staff. Never forget to include the methods you employ to help the needy. Make the website full of relevant information so that people believe in your prospects.

Designing the need

The website needs to have an appealing design. Obviously, you cannot make it attractive adding too many bright colors and images.SEO Service India It should be calm and pleading. You can add photos and videos of your organization and the people benefitting from it. These images and videos should feature the services you provide to the deprived. You can add payment tools like PayPal so that visitors can donate instantly. Do not make the website overdesigned. It may deliver a wrong message of the cause.

A website for an organisation that supports a cause must be full of relevant information. It should state the processes used in providing help for the poor and those in need. It must list out the type of people it helps and the list of payment options. Keeping the above-discussed points in mind, you can develop an effective website for your nonprofit company.

SEO - On-page Optimization Explained

In this Internet era, every website wants to do a good business. Businesses owner understand the fact that popular websites can earn them millions in no time. To make that possible, the website must have a high index rank on the results page of search engines like Google, Yahoo, Msn, Bing, etc. The website must have a proper level of Search Engine Optimization (SEO). Optimization is the process of tweaking a website to suit the requirements of a search engine. SEO is of two types - On-page and Off-page.

On-page optimization is very important and web designers should not ignore it if they want a good ranking for their website.Web Design India It is the most basic method in SEO. A designer should effectively optimize his website to rank high on search engines. He should understand the important factors of on-page SEO. He should use it in new websites as well as the new pages that he adds to the website in its lifetime.

On-page optimization has been there for a long time. It started as an attempt to increase the quality of websites when the Internet was relatively small. This worked well and people adopted it soon. Today, since the web has grown too big, we require both on-page and off-page optimization.

On-page optimization is the process of tweaking the website’s code for better Search Engine Optimization results. It involves choosing the right set of keywords. These keywords should be relevant to the subject of the website. Using an optimized, original and unique content is necessary. A website developer should index his website to the main search engines. This way the search engines get to know about the new coming website.

Every designer should ensure the arrangements of Meta tags, headings, etc in a web page are accurate. He should properly structure the website’s HTML code.SEO Company India The URL of the website should be search engine friendly. It should be relevant the subject of the website. A developer should give ALT attribute to each image and graphic in the website. He should use proper text in links and anchors. He can use nofollow Meta for website he does not trust. He should design the website as per the W3C standards. He can verify the validity of the website with the help of W3C Validator tool.

For an effective SEO, every webmaster should understand and implement the basic laws of SEO. He should effectively optimize the website. He can buy SEO tools that are available on the Internet. However, these tools are just basic applications and provide optimization at lower levels. If you want a higher degree of optimization, you can hire a SEO specialist. Most of the web-designing companies provide Search Engine Optimization facilities for websites. You can avail the benefit of SEO by professionals for your website.

Local Internet Marketing

The internet has always been a medium of global reach. People can virtually visit any place on the earth via Internet. Businesses use Internet to make a strong global presence. However, it does not mean that Internet helps to make your business countrywide or global. Even a local business can use it to increase its popularity and sales. In fact, Local Internet Marketing is a rapidly growing aspect of Internet.

Local Internet marketing is a way of promoting a business in its proximity. Many international and local businesses are jumping into this arena. Internet is providing them a perfect platform to reach to extended group of customers. It has proved a turning point for local businesses. Now, they are able to host their own websites providing better opportunities. Internet helps local groups to promote their business, products and services. They can keep their websites updates with frequent promotions, offers and discounts. This will draw a good number of online customers towards it. According to experts, the local internet marketing consists of four aspects.

The first thing to do is to create a website for the business. It should have fresh, unique and original content. It should excite and attract the customers. Always host your business website on a paid server rather than a free one. The domain should be catchy and attractive so that people are able to remember it for long. Secondly, the business must choose effective methods of promotion.Website Design Company Delhi You can employ PPC (pay per click) services like Adwords, Facebook Advertising, etc to promote your business. Always do the SEO (Search Engine Optimization) of your website to rank it high on the SERP (search engine index pages). Thirdly, you should establish a good and stable relationship with your customers. The web audience tends to drift away easily. Thus, making a good reputation will make them stick to your services for longer. Finally, it is very important to measure the results of promotional activities. You cannot make a further decision if you are short of relevant information. Always use reliable statistical tools to measure your success rates.

Today, millions of businesses have already stepped in to the Internet ring. Most of them are already providing services locally via the Internet. Let us take the example of Dominos Pizza.Website Design Company Gurgaon It is an international company proving local services in every big city of the world. People used to telephone them to order pizzas. Now they have added a new feature to their services. You can visit the Dominos website and order pizzas online. Similarly, many shopping websites are providing online booking and ordering facilities.

As a business owner, you should look forward to making an online presence. You can hire a website design company to make a professional website for your business. This will not only help your business to gain credibility and reputation but also increase your sales.

Importance of a Valid HTML in SEO

HTML is the backbone of any website that is running presently on the Internet. A designer may code the website in any language or any framework. On viewing, a browser will definitely convert it into pure HTML. The reason is that browsers are only capable of rendering HTML code. Hence, it is very important to know everything about HTML before you consider yourself as an efficient web designer.

HTML also helps in SEO. SEO stands for Search Engine Optimization that is the process of optimizing a website suitable to the search engines like Google, Yahoo, MSN, Ask, Bing, etc.Website Design Company India These search engine rank websites in their results page according to the quality of HTML present in the web pages. They index websites based on many factors present in them. Some of the factors that affect the ranking of a website in the search engine results page are valid HTML code, proper structuring, unique and original content, presence of important keywords, etc.

Valid HTML code is very important in Search Engine Optimization. It helps Google and other search engines’ spiders to trace the data in the web page. If the search engine is able to penetrate the page to the depth, it will surely rank high. A wrongly coded HTML web page hinders the path of the search engine spiders.

Since its inception, HTML has changed a lot. Now it has become a complex language. Millions of people have come to web design in the recent years. Millions of others are learning it to become web designers of the future. People new to web design are prone to do certain mistakes that might result in an invalid HTML code. This will surely decrease the quality and the ranking if the website. The complete marketing effort might go waste. This is however, never wished-for.

The relation between SEO and HTML lies here. Search engines parse the HTML code to look for information. Whenever they find any information, they store it in their database. They might not be able to find relevant information if the code is erroneous. Therefore, a programmer has to be careful while coding the HTML. Some of the common mistakes that new designers might do are following.

Tags not closed properly can result in wrong code. Even a missing bracket can sometime be penalizing to a website.SEO Company India It might happen a search engine might completely ignore website. However, most of the search engines are able to ignore minor errors in the page, but a developer should avoid making mistakes.

Every web designer can verify the validity of his website by free services available online. The World Wide Web Consortium, W3C provides a free Validator to verify your web pages. This validation program checks the conformance of websites to HTML, XHTML, CSS, etc. You can easily get your website verified and authorized.