With Some Bad News for UK Contractors Arrive Some Good Tidings, Too
Independent contractors in the United Kingdom, contrary to what some believe, have never had it easy. Tasked with paying into the National Insurance system, along with being subject, by default, to especially exorbitant-seeming income tax rates, they have long sought ways to make life a little easier and less financially painful. To this end, intermediaries legislation ir35 contracting arrangements have long been a fact of life.
In many cases, particularly in the past, this proved to be an effective way of lessening the burdens that contractors felt subjected to. Through simply setting up and properly administering umbrella companies in uk contracting work, contractors could enjoy such benefits as a generous employment allowance for National Insurance system payments. While the work required was never anything that the average contractor enjoyed, the benefits were compelling enough that most found the effort worthwhile.
Unfortunately, that opening looks to be closing quickly. Never happy with the country's provisions for independent contractors, the United Kingdom government has recently signaled, in the form of its proposed budget, that it would be seeking to adjust things in significant ways. For one thing, it looks as if the National Insurance allowance will be going away for good or will, at the very least, become much harder to qualify for.
While this would seem like dire news for many contractors, the fact is that there are some other, lesser-known options that could prove to be just as satisfactory, in the long run. For example, companies like UK Contract Partners have spent years designing alternatives to the traditional umbrella company uk contractors so often relied upon in the past.
Existing entirely outside of the umbrella company sphere that is now coming under fire from the government, options like these could well prove to be the best way for contractors in the U.K. to go in the near future. Instead of relying on a single, fragile legal instrument to shelter contractors from the worst tax consequences, these alternatives make use of a host of tax benefits, rebates, and other incentives in parallel.
In addition to being less likely to fall apart in a single blow, as the traditional umbrella company almost seems poised to do, arrangements of this kind offer other potential advantages. One of these is that the companies that design them also handle all of the necessary administration, doing away with a longtime headache of the contracting world. Even as bad news of one kind arrives, then, what looks like good news of another is being heard, as well.
