Eight top tips to satisfy the tax man!

Sept. 10, 2010 - PRLog -- At a recent breakfast seminar held at the Marcliffe Hotel, Aberdeen, NES legal and commercial director, Stephen Rookes, highlighted the importance of risk mitigation with any new legislation and encouraged hiring companies to act now for suitable preparation for the Agency Workers Regulations (AWR), due to come into effect in October 2011.

While acknowledging the importance of protection for vulnerable workers that the AWR have been designed to address, Stephen stressed that technical and engineering personnel working within oil and gas often work through their own limited companies for the favourable tax advantages. For these individuals, being given the same rights as a permanent counterpart could jeopardize their IR35 status, leaving them open to investigation by HRMC.

“Organisations taking on high-value freelance contractors within the oil and gas industry should understand the effect that IR35 status has on an individual’s tax position,” Stephen insisted. “They should also know how this relates to the AWR – indeed, for agency workers in business on their own account, the regulations don’t even apply!” he added.

Stephen’s eight top tips for staying outside of IR35 are:
1. Be a professional B2B service – not a person!
2. Make sure your service can be substituted with another service provider
3. Don’t feel obliged to accept work – or expect the company to offer it!
4. Work towards specified deliverables / outcomes, not under the direction, supervision or control of the organisation
5. Use your own professional judgement to determine the manner in which you provide services
6. Make sure your work is of a satisfactory standard – or risk not getting paid!
7. Take out the necessary liability / professional indemnity insurances
8. Don’t become a “deemed employee” – don’t go to the Christmas party, don’t become a fire warden and don’t use a company email address!

“It’s always been in the best interests of limited company contractors to understand how they should be working to stay outside IR35 legislation – and avoid getting hurt by the tax man – but companies preparing to implement AWR and provide equal treatment to their temporary and permanent workers should familiarise themselves with IR35 as part of their planning process to understand who is – and isn’t – within the scope come October 2011,” Stephen concludes.

NES issues “IR35-neutral” contracts to all its limited company contractors and the company’s commercial team works closely with third party legal and financial experts, as well as recruitment trade bodies, the REC and APSCo, so that – even if the “abolishment of IR35” rumours are true – contractors will be supported.

# # #

Founded in 1978, NES is a leading global technical recruitment business providing professionally qualified contract staff to blue chip clients across the world in the oil and gas, infrastructure, rail, power and IT sectors.