If you run, manage or own your own company then you will have more than likely heard about the ‘IR35’ legislation, and if you haven’t you should have. At ClearSky Accounting, as an accountancy expert, we’ve outlined everything you need to know about IR35.

What is IR35?

The IR35, so called after the Inland Revenue (now Her Majesties Revenue & Customs) press release number 35 of that year, is ‘Intermediaries Legislation’ introduced to ensure companies working through intermediary companies, such as personal service companies, are paying the appropriate tax.

Why was it introduced?

According to HMRC:

“The aim of the legislation is to eliminate the avoidance of tax and National Insurance Contributions (NICs) through the use of intermediaries, such as Personal Service Companies or partnerships, in circumstances where an individual worker would otherwise –

• For tax purposes, be regarded as an employee of the client; and
• For NICs purposes, be regarded as employed in employed earner’s employment by the client.”

Before the introduction of the legislation, individuals were able to avoid paying tax as an employee when receiving payments for services and only paying NIC in the Class 1 bracket by providing them via an intermediary.

Who does IR35 cover?

The IR35 is not aimed at any industry in particular however is does apply to you and your company if you provided services to a clients via an intermediary company (usually a services company or a partnership).

In short, if you provide services to a client, via an intermediary or under an arrangement involving a third party, and the situation is such that if these services were provided directly to the client you would be considered (for tax purposes) as an employee of the client, then you are required to pay tax within the IR35 bracket.

What happens if I ignore the legislation?

If it is found that you have not followed the proper protocol and ignored the legislation then measures will be taken to ensure that you pay the appropriate tax and NIC, and interest and penalties may be added on top.

Click here for more information on IR35 and how to avoid any penalties or charges.  

Author Bio: Leah Jarratt is a regular guest writer for ClearSky Acounting, your accountancy expert.

Serious economic challenges can exert a high degree of psychological pressure. Especially when expenses are exceeding the available income for extended periods of time, strain levels in a household can get insufferable. During this period, many will consider bankruptcy their only available option. In itself, this need not be a problem. After all, declaring bankruptcy means all financial obligations owed to lenders will be dismissed if your filing is decided in your favor. Choosing to file, however, is a serious matter and will seriously affect your life for years to come. Ahead of declaring bankruptcy you should therefore take numerous aspects into account – especially since debt and bankruptcy don’t have to go hand in hand.

The first question you should ask yourself is whether you may be able to restructure and get rid of your debt by yourself. When debts are too much to handle, after all, you are going to struggle to pay the lender commitments you agreed to. In this case, bankruptcy can be an option. Before arriving at that conclusion, however, you should take all available steps into consideration to improve your financial situation: Is there a car which can be traded in? Can the house be refinanced for a decrease in the mortgage payment? Are there higher paying jobs that can be added to the household income? There are also a variety of practical steps you can take to at least return to breaking even: Cut back on household expenses and instead of going on expensive vacations, go for cheaper alternatives. This can often help to relieve the stress of debt for you and your family. Try cutting back on extras like cable, cell phones and eating out before deciding to declare bankruptcy.

Mostly, though, bankruptcy is something best handled by experts and you should consider getting professional help. A debt consolidation company can help you negotiate with creditors to reduce the amount you have to pay each month, for example, and thereby avert bankruptcy. They can help create a plan to get you out of debt and back on the right path towards a sound financial situation. They will also assist you to determine how much debt you actually have. Although it may sound hard to believe, many people tend to hold an exaggerated view of their financial misery. You may be one of them.

The Debt Advisory Line have years of experience in helping you establish a precise picture of your debt and systematically reducing it. If you’re in need of debt management, contact us now to find out how we can assist you.

Financial experts like debt guru Dave Ramsey and insurance advisor Courtney Rogers agree that only a few kinds of insurance are truly necessary. These include

• Term life (while you’re working)
• Homeowner’s (for any time you own a home)
• Auto (required by law)
• Disability (while you’re working)

Of these four, statistics show that disability insurance is the one missing from most homes. It might be that this insurance gets less attention in the media. It might be that people don’t understand the risk. Whatever the reason, those who are “working without a net” in regards to this important protection should consider these little-known benefits of disability insurance.

1. 1.       Faster Recovery

This is a simple equation. Stress reduces the body’s ability to heal from illness and injury. Being out of work from a disability causes financial stress. If you’re hurt or ill with no income, your body can’t get you back to work as quickly as it would if you were getting paid. Being disabled without income also makes it harder to pay medical expenses, which can further increase how long it takes to get well.

1. 2.       Return on Investment

Disability insurance premiums cost 10 percent or less the price of term life insurance. Further, you’re more likely to need it at some point in your life than to make a claim on your life insurance – and you’re infinitely more likely to need it more than once. Statistics show only auto insurance is more likely to result in a payout to you, and disability runs at about one-fifth the price of average auto coverage.

1. 3.       Reduced Family Illness

While you’re down, it’s important for your family to operate at peak ability to take up the slack. Unfortunately, lack of sleep and worry about you make them more likely to become ill than at any other time in your life. Though the payments from disability insurance won’t end all of their stress, not having to worry about money will help their immune systems – and help pay for preventive care that will keep most illnesses minor.

1. 4.       Enhanced Estate

If you want to leave a little something behind for your heirs, a long disability is one of the best ways to ruin that plan. The lost wages can force you to live off of savings, then borrow off of home equity, and dip into retirement funds until nothing is left to leave.  Although disability insurance won’t pay for the costs associated with hospice or in-home care, it will keep wages coming in while you’re ill.

Any horror stories about losing wages from illness or injury? Join the conversation and tell us about them below. 

In the early days of cash and loans, most payday loan lenders operated out of small check cashing shops, back when the advance pay day loans industry was simply a side service of these shops. As the cash and loans business evolved over the years, payday loans lenders saw the huge potential of this market, and since then it has evolved into a national phenomenon. There was a huge flood of consumers wanting to take advantage of this product, and payday loans lenders realized they needed to change their businesses to focus mainly on these types of loans. People constantly find themselves in negative financial situations so the demand for small cash loans just keeps on growing. 

Today the largest, fastest and easiest group payday loan lenders can be found online, although this isn’t the only option. The majority of these companies also offer other services such as bill pay, money order cashing and check cashing services, but the main focus of these payday loans lenders is primarily on offering 24 hour cash loans. 

The online variant of quick cash loans with no fees has exploded as customers found that they could get their hands on the cash much quicker and more easily by filling out an application, than by walking into the bank. The banking process is a long and extensive one that can take days or even weeks before the money is there. With instant payday loans, the money can be deposited into the borrower’s bank account by the payday loans lenders in as little as one hour. The online process is simple and easy and as a result, the payday loans business has seen a huge explosion in its market. 

Banks have since realized that the competition of these instant payday loans businesses has grown to be very stiff, and they’re just now starting to act. As the bank loaning process was too long and extensive to compete with the small loan business that payday cash and loans and payday loans lenders are taking over, many banks have entered the market in a roundabout way, by offering loans to the payday loan lenders themselves, sometimes even joining into partnerships with them so that they can take over this growing niche. 

There are many other businesses that now offer payday cash and loans including title loan lenders, pawn shops and even department stores. There is also a growing number of standalone payday cash loans to meet the growing demand by people in need of these services. The online payday loans business has been taking off extremely well over the last several years and payday loans lenders have realized that the internet can be an extremely effective way to get people the money they are so desperately in need of. 

The business has evolved from a small side service of check cashing shops to a full-blown industry of its own, competing with banks and other lending institutions.