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UC Finance urges contractors against paying unnecessary taxes

Last updated Tuesday, November 20, 2012 09:00 ET

UC Finance celebrates National Freelancers’ Day by urging UK’s IR35 contractors to ensure that they are not one of the workers paying unnecessary taxes.

11/20/2012 / SubmitMyPR /

UC Finance has called upon Britain’s contractors to celebrate National Freelancers Day by taking steps to check whether they are one of the independent workers currently paying £1billion in unnecessary taxes every year.

While controversy continues to rage around the questionable tax contributions of many large companies, UC Finance’s research suggests that half of the UK’s estimated 200,000 contractors could be losing up to 11% of their annual earnings after being forced to work through an Umbrella Company by HMRC’s IR35 regulations.

“Given the news that has emerged recently to suggest that companies like Starbucks and Amazon are paying only a fraction of the taxes the exchequer might have expected to receive, it is ironic that around the country, individual contractors and freelancers are paying over the odds due to the confusion surrounding the IR35 rules,” said UC Finance Managing Director Joanna Holloway.

“The good news for freelancers is that there is more support for them than ever before from within the industry, with free advice and online tools available to help determine whether IR35 applies to them and a variety of products and services dedicated to providing legal protection and financial support.”

Many existing contractors are currently working through Umbrella companies due to fears that their independent status could be questioned by HMRC under the IR35 regulations. It’s an expensive option, with Timesheet Finance provider UC Finance calculating that a freelancer earning £350 a day could be entitled to save £10,000 a year - including all costs - by setting themselves up as a one man limited company.

With recent statistics from Freelance Advisor suggesting that more than half of the UK’s nine to five workers considering going it alone, UC Finance has joined forces with leading industry experts to provide existing or potential freelancers with advice, information, insurance, accountancy and finance to bridge the gap and support the ever increasing entrepreneurial spirit currently alive and kicking in the UK today.

In order to create a hassle free escape route for freelancers currently working through Umbrella Companies, and workers considering going it alone, the company has partnered with business contracts and assurance specialist Qdos and contractor accountancy firm FW Accounting to create a cost effective one-stop solution.

After using the campaign’s free online calculator to check whether leaving the Umbrella Company setup would save a significant sum, contractors have the option of contacting UC Finance directly by telephone, email or live chat to discuss the process of switching to a limited company format. The campaign’s accountancy partners will provide free business incorporation as part of the solution, with Qdos supplying the necessary business insurances and UC Finance stepping in to provide the financial support required to keep the participant’s income stream flowing steadily throughout the process.

Holloway continued: “Given the increasing numbers of individuals entering the freelance market due to the current economic climate, it is unacceptable that Freelancers and contractors across the UK are losing significant sums of money because they’ve been sold or frightened into taking an option that simply isn’t the best solution for them. Recent years have seen ‘freelancer bashing’ become a national sport - it’s high time they were given a (tax) break.”

About UC Finance
UC Finance was founded to bring a refreshingly ethical, straightforward and transparent approach to the financial sector. Emerging with a bright new ethos from the wreckage of the traditional banking industry, the company provides freelancers and contractors with the essential low cost borrowing facilities frequently denied them by High Street banks.

Combining a 21st Century approach to the Finance sector with old world values, the company treats self-employed customers with the respect they deserve, offering accessible finance packages to a range of one-person limited companies.

All costs, which are fully tax deductible, are agreed up front with no hidden charges. Clients pay less than 4% of their invoice value, on average, for the full service : - cash advanced, invoices raised, and collections undertaken.