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Hope you’re ready for tax changes this week!

New changes to the way HM Revenue & Customs taxes contract workers go into effect this week – you had better be ready for the new taxation landscape!

It doesn’t matter if you’re a small business that outsources its tax preparation to a freelancer or if you’re a contractor accountant yourself – you’re going to feel the burn from 6 April when the new regulations in the latest Finance Bill go into effect. Don’t act like you didn’t know this was coming, either ;these changes were announced in the 2015 July Budget, so you’ve got no excuses whatsoever besides your own laziness or ineptitude.

Of course you could be forgiven if you simply didn’t have enough time and energy to get prepared – especially if you’re a freelancer or some other kind of sole trader yourself. The vicissitudes of being a small business owner often lead to things falling through the cracks after all, so if you knew these changes were coming up but simply didn’t have the resources to prepare, you do have at least a modicum of my sympathy. Then again, if you work in the accountancy or financial services sector – and you’re a contract worker yourself – you’re deep in the weeds, my friend.

So what’s going into effect? Well there are quite a few changes, but the mot important one for small firms and freelance personnel is that certain types of contractors, such as those working through umbrella companies or a personal service company are going to find it a lot harder to claim their travel and subsistence expenses on their taxes. That’s right, HMRC in its infinite wisdom has decided to close the T&S tax relief loophole for all of us engaging in the practice – as if we’re all nothing but tax avoiders trying to deprive the taxman of its rightful share of our hard-earned cash.

If you’re outside IR35 you’ll have nothing to worry about. Of course it’s going to be easier to fall inside IR35 than before, thanks to the new “supervision, direction or control” test, which is much less forgiving when it comes to determining if you’re going to fall victim to the disguised employment rule. SDC is rather horrid, and people have been complaining about it for more than six months. Not that this changed the minds of the Government, as it routinely ignores the pleas of those who owe it money.

So there you have it: hold on to your bums, as we’re going to be in for a bumpy ride!

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