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| CURRENT SECTION :: IR35 / IR591 | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
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The PCG (Professional Contractors Group) is urging freelancers to await the outcome of the Synaptek case before sending in P35 returns. This high profile IR35 case, Synaptek Ltd vs Graeme Young (HM Inspector of Taxes), was heard in the High Court last week. PCG's advice to freelancers is that neither they nor their accountants should submit their P35s before the Synaptek judgement, expected in a fortnight. Simon Griffiths, PCG Deputy Chairman, says "You should do the provisional calculations. Document any factors affecting your likely IR35 status. Then join PCG for detailed information about IR35, tax investigation insurance, discounted contract reviews and the best expert advice and support. PCG is a truly virtual organisation with a powerful web presence; you can find all you need to know on this matter at www.pcg.org.uk." Former policeman, Gordon Stutchbury, a freelance software engineer, founded his company, Synaptek, in 1990 and was caught under the controversial IR35 tax or intermediaries legislation, when the tax commissioners ruled that he was a disguised employee of one of his clients. The proportion of his company's turnover deducted in tax more than doubled as a consequence. Stutchbury could not continue developing products that he had been working on for a decade. He made the company dormant, let his employees go, and found a permanent job. PCG is funding and supporting Stutchbury's case. Simon Griffiths says that many thousands of freelancers could find themselves in a similar situation, paying thousands of pounds extra in unnecessary tax. He continues "PCG members will get all the information that they need about the impact of the Synaptek case and how to decide their IR35 status, by the end of the day of judgement. We're committed to providing that." 19 May is the Inland Revenue deadline for submitting P35 returns. The effective deadline for making an election regarding IR35 status is 19 April, when payment of outstanding 2002-2003 PAYE and Class 1 National Insurance Contributions is due. Many companies have a 31 March year end though, and for them that is the latest practical date by which their P35 decision must be made. PCG's message is that freelancers have time to wait for analysis of the Synaptek judgement, and that with up to 25% of their companies' turnover riding on the wrong decision, they cannot afford not to get the absolute best advice and make properly informed decisions about their IR35 status. Mar 7, 2003 Email this article Printer friendly page Previous Page
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