Ltd freelancers urged to file invoices ahead of March
8th February 2017 | News
The Association of Independent Professionals and the Self-Employed (IPSE) is calling on freelancers providing services to the public sector through their own limited company to submit their invoices ahead of 6th March in order to get paid before the end of the 2016/17 tax year.
The IPSE warns that failure to do so could result in limited freelancers being hit with ‘punitive’ new tax charges that are set to be applied from 6th April.
From the 2017/18 tax year, all payments made by public sector clients – or recruiters in contractual agreements with public sector end users – may be made via Real-Time Information (RTI), a system previously reserved just for staff.
The new rules mean that, rather than spending considerable time reviewing every freelancer’s IR35 status, end-users will be able to put all limited companies on RTI – effectively placing them on their company payroll.
A spokesperson for the IPSE said: “Evidence is already emerging that public sector clients are unwilling, or unable, to make the IR35 assessment.
“[So] regardless of their [freelancers’] status and without considering whether this reflect the reality of the arrangement … from 6th April, tax and NICs will be deducted at source.”
Chris Bryce, chief executive, IPSE, believes freelancers should consider asking for more regular payments to counterbalance the new legislation.
“Any contractors which invoice one month in arrears, on 30-day payment terms, will need to get their invoices issued in the first week of March,” said Bryce.
“[And] any work completed during March but paid for after the 6th of April will be subject to the new rules – I’d recommend insisting on weekly or even daily payments if you can, in order to minimise the losses you will suffer as a result of this ill-thought out legislation.”