Employment legislations affecting self employed workers
With growing red tape for small businesses and employment legislation and regulations adding extra burden for the UK’s self employed workforce...
With growing red tape for small businesses and employment legislation and regulations adding extra burden for the UK’s self employed workforce, the future of umbrella companies could be threatened. Many recruitment agencies and contractor accountants are discovering that more workers are choosing to work through a limited company, as this tends to offer a better return than working through an umbrella company. However, limited companies are not always the best solution.
To run a limited company as a contractor requires considerable effort and can be time consuming with demanding administration and invoicing of clients. Limited companies can also fall under the scope of one of the main employment legislations, IR35, which has massive tax implications for anyone who is affected. This means that it is not simply a case of choosing between an umbrella or limited company based on the highest return; each workers situation and contract is different and so the guidance of a specialist contractor accountant is vital in order to select the most suitable option.
As a self employed worker there are many benefits drawn from working through an umbrella company. In comparison to operating a personal limited company, an umbrella company can provide specialist advice and security for a worker, most importantly the use of a specialist contractor accountant. Expert advice on accounting related issues is key in the current day, as rising red tape, employment laws, and other EU regulations mean that more and more workers are being caught out.
The UK tax system is currently undergoing a review because of the huge amount of burden it is placing on small businesses, with the government finally taking notice of this trend. However, whilst this legislations and red tape remains there are numerous stumbling blocks for self employed workers with the tax system. This is why establishing a good qualified accountant is vital, providing both peace of mind and additional security when dealing with HM Revenue and Customs.




























