Oct 29, 2018

Budget 2018: Contractors face higher tax and NI payments

Hundreds of thousands of private-sector contractors face higher tax and National Insurance bills from April 2020. The chancellor announced that tighter tax rules for those working in the public sector will be extended to those working for private firms. Up to now many contractors in personal service companies have been paying less tax and NI. But from April 2020, larger businesses - like banks - will take on responsibility for deciding which contractors will need to pay more tax and NI. The rule change will not apply to the smallest 1.5 million businesses. If classified as an employee for tax purposes, they would have to pay income tax, and NI at 12% on the money paid for their work. "Millions will now worry they will need to pay far more tax on their earnings."

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