What,are,Umbrella,Companies,an business, insurance What are Umbrella Companies and IT Contractors?


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Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable{mso-style-name:"Table Normal";mso-tstyle-rowband-size:0;mso-tstyle-colband-size:0;mso-style-noshow:yes;mso-style-priority:99;mso-style-qformat:yes;mso-style-parent:"";mso-padding-alt:0in 5.4pt 0in 5.4pt;mso-para-margin-top:0in;mso-para-margin-right:0in;mso-para-margin-bottom:10.0pt;mso-para-margin-left:0in;line-height:115%;mso-pagination:widow-orphan;font-size:11.0pt;font-family:"Calibri","sans-serif";mso-ascii-font-family:Calibri;mso-ascii-theme-font:minor-latin;mso-hansi-font-family:Calibri;mso-hansi-theme-font:minor-latin;}Nowadays a huge percentage of IT Contractors feedthe money they earn from their IT Contracts via an Umbrella Company.IR35 was set up because the Government believed that some IT Contractor s were justdisguised employees. It was designed to catch those who finished as a permanentemployee at a company on the Friday only to become a contractor at the samecompany on a Monday. As contractors they were able to claim all expensesincluding travelling costs.Umbrella Company NetUnfortunately the IR35 legislation affected a lot more than those contractorsin that particular net and so Umbrella Companies came to the fore.An Umbrella Company permits ITContractor accountants to be able to claim some expenses from the business.A few more risky Umbrella Companies obtained set up called Managed ServicesCompanies but the Government has now clamped down on that particular type ofUmbrella Company.Another type of Umbrella Company, the EBT, has started up which puts theearnings from a contractor through an offshore trust but the Chancellor haspromised to crack down on that in 2011.Select Safer Umbrella CompaniesIt is clearly attractive to an IT Contractor if his Umbrella Company agree withhim or her to keep more of his solid earned money but in the long period he isbetter with a safer type of Umbrella Company especially the Umbrella Companieswho treat the contractor as a PAYE employee.These Umbrella Companies do the whole thing for the contractor together withprocessing timesheets, invoices and the payroll and are still able to let himor her claim a few expenses.How to selection of Umbrella CompanyIn the long term these type of Umbrella Companies will allow the IT Contractorto be able to sleep safely in his or her bed at night knowing that HMRC and theChancellor are not going to introduce retrospective legislation which meansthey have to pay years of back tax.The selection for IT Contractoraccountants are Limited Companies if they think they are outer IR35, safePAYE Umbrella Companies or the more risky type of Umbrella Company which willlet them keep additional amounts of their money but may keep them at futurerisk of paying back tax. KB Accountancy and Taxation`s tax accountants can also helpthe client who is behind in filing tax returns as well as the provision of professional tax audit consultation services.

What,are,Umbrella,Companies,an

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