Welcome to the latest news from FPS Umbrella

Breaking News for FPS Umbrella Members

Alistair Darling, the UK Chancellor, gave his Pre-Budget Speech in Parliament on the 24th November. The speech drew out key aspects of the Pre-Budget Report that was later posted on the Government’s Treasury Website. Following consultation with the Industry, the Government has decided not to take any action on tax relief for travel and subsistence expenses for temporary workers! Great news for FPS Umbrella members. If you would like to read more about it go to page 104 of the full report: www.hm-treasury.gov.uk/prebud_pbr08_index.htm

Out of the fire and back into the frying pan!

With the credit crunch looking like its turning into a full blown recession, funds are tight for everyone, so the temptation to take chances is greater than ever.

A number of providers are recommending Personal Service Companies (“PSCs”) again as a way to increase take home pay.

The risks involved with this option are now greater than ever, with the MSC legislation outlawing managed options, individuals that are ‘sold’ a PSC are back at the mercy of IR35! The financial advantages of providing services through a PSC, have been reduced to just saving the National Insurance costs that would apply to employment income, as the small company corporation tax rate is now 1% higher than the standard personal income tax rate, with a higher rate tax on dividends eroding the benefits even further. Added to this, to enable accessing these financial benefits there are significant costs in operating a PSC some financial, such as accountancy fees, but the majority being the level of financial risk exposure.

The recent success by HMRC in the Dragonfly Consultancy Limited IR35 appeal, means that the risk of being judged to be working inside IR35 and being assessed for unpaid PAYE and NICs is now far greater than ever before.

IR35 is a very complex piece of legislation covering a number of different areas of a business relationship in determining whether an individual providing services through a limited company is actually a deemed employee of the organisation receiving the services. The areas to consider include:

•     the form of the contracts between all parties;
•     the rights of individuals to provide substitutes to perform the services;
•     the obligation on both the receiving organisation and the individual, to provide and        undertake work;
•     the level of control the organisation has over how the services of the individual are        being provided

Additionally individuals must be mindful that they are running a business and HMRC would expect a certain amount of risk of making a loss as well as a profit, whilst at all times acting independently.

Of course when it comes to Limited Companies, IR35 is just one piece of legislation to adhere to. Individuals will also have to comply with the Companies Act, Income Tax, National Insurance and VAT legislation along with Employment Law.

So in summary beware, it may seem attractive to jump out of the PAYE taxation ‘fire’, but you may find that you are jumping straight back into the IR35 fines and penalties ‘frying pan’.

Freelance Professional Services Limited only provides Umbrella services, with all our procedures developed in consultation with HMRC, you can reap the benefits of contracting without getting burnt!



FPS TradePay launch

We have now extended our FPS Umbrella solution into the construction industry offering a service that offers the same great benefits to construction trades and professionals. Offering an alternative to the controversial CIS, contractors using this service will be able to receive their pay after statutory deductions of National Insurance and PAYE tax have been made from gross earnings.

Receipted business expenses can be offset against earnings which will have a beneficial impact on their take-home pay. These are just a couple of the advantages offered and others include: weekly prompt CHAPS payments, no paperwork, 24 hour personal accident cover and up-to-date health and safety information, what’s more individuals do not have to register with HMRC and supply a Unique Tax Reference to use this service. Set-up is quick and easy.

If you know anyone in the construction industry that could benefit from this new service, recommend them to us and we will pay you £25 worth of gift vouchers once they have received their first payment on this scheme. Please ask your referrals to contact our membership team on free phone 0800 634 4848 and remember to make sure they give your details.

Avoid last minute payment panics!

We strongly recommend that all members confirm with their agencies Christmas and New Year payment arrangements to avoid any last minute payment panics with regard to receiving funds on time!

The standard BACS turnaround over the Christmas and New Year period is:

Funds received Mon 22nd Dec will be cleared into bank account Wed 24th Dec
Funds received Tues 23rd Dec will be cleared into bank account Mon 29th Dec
Funds received Wed 24th Dec will be cleared into bank account Tues 30th Dec
Funds received Mon 29th Dec will be cleared into bank account Wed 31st Dec
Funds received Tues 30th Dec will be cleared into bank account Fri 2nd Jan
Funds received Wed 31st Dec will be cleared into bank account Mon 5th Jan
Funds received Friday 2nd Jan will be cleared into bank account Tues 6th Jan

Tax Return update

The deadline for tax returns and payments of tax liabilities is fast approaching 31 January 2009. Completion of tax returns now needs to be done online to avoid penalties. Registration to file online can take up to 10 working days. If you would like assistance with completing tax returns please contact Smooth Tax on: T 0870 7669 249 or email taxadmin@mysmoothgroup.com by 31 December to avoid disappointment.

Main office opening hours over Christmas and New Year

Over the festive period our offices will be open to do business but the opening and closing times will differ, please see below for details: