TaxPersonal TaxFirms without Net access are losing out

Firms without Net access are losing out

Accounting practices are ill-prepared to advise their clients about personal services companies because most do not have access to crucial guidance that is solely available on the Internet, firms have warned.

Several mid-tier firms contacted by Accountancy Age, as well many of the sole and small practitioner firms, do not have desktop access to the internet. The Inland Revenue, which has viewed the IR35 issue as particularly relevant to IT contracts, has tended to post the majority of its guidance documents on the notorious legislation online.

Anne Redston, chairman of the personal tax committee of Chartered Institute of Taxation, said: ‘The Inland Revenue has only been putting things on the web and so IT people are OK. But other groups are not so up-to-date because they are not as familiar with new media as they should be.’

IR35, which is due to come into force with today start of the new tax year, is designed to attack ‘consultants’ who, in the eyes of the taxman, escape their share of tax and national insurance by ‘masquerading’ as self-employed contractors.

PricewaterhouseCoopers tax partner John Whiting said: ‘Small firms do not have access to the internet and those which don’t are struggling with this. Another factor is that even if you do have internet access, you have to keep checking to see whether there have been any changes.’

To date, the Revenue has targeted high-profile IT contractors and chose to use the Internet to disseminate information about contractor’s obligations under the new legislation.

But other groups of subcontractors are set to be hit when the new regime begins today.

‘Partnerships doing this sort of work will also be hit,’ Redston said. ‘Accountants and tax advisers should be checking to see if they have got anyone who will be affected by this legislation who is not an IT contractor.’

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