Sole Traders

Adaptive Accountancy Sole Traders

The IR35 tax regulation changes are set to come into force next month, which will impact many sole traders who offer their services on a contractor basis. In the following sections, we’ll explore what sole traders need to be aware of ahead of these changes.

What do they involve?

Right now, those working as a sole trader can be classified as outside or inside of IR35. If they are outside it, this means that they are deemed self-employed by HMRC and deal with tax matters themselves. If they are inside, they are classed as an employee and pay tax accordingly. The changes will see companies hiring contract workers required to work out which category they fall into and pay the necessary tax if they are inside it.

What impact could it have on sole traders?

It could lead to some companies becoming more reluctant to hire contractors. If an individual provides their services as a freelance contractor, they must find out if they will be classed as inside or outside IR35 under the new rules. They can speak to an accountant for sole traders in Doncaster or wherever they live if they need help. If they are working outside of it when they should be classed as inside, HMRC can claim back taxes that are owed for up to six years, which has the potential to be financially disastrous for some self-employed contractors.

Here at Adaptive Accountancy, we are experts in dealing with IR35 issues, so give us a call now if you have concerns.

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