Solo saves the penalties!
The Recruitment and Employment Confederation report that there are more than 1.3 million contract workers currently engaged through employment agencies in the UK. A further 900,000 sub-contractors are registered under the Construction Industry Scheme. Solo Accounting has recognised the enormous market potential of developing one single software solution which would cater for all of the business administration, payroll, book-keeping, accounting, tax and legal requirements of freelance consultants, independent contractors and sub-contractors wishing to operate through their own limited companies.
Simon Fullagar, Chief Executive of Solo Accounting, states “There are dozens of software developers who have designed book-keeping and accounting solutions for the accounting industry and to cater for the needs of medium and large businesses, who employ suitably qualified accountancy staff. These packages are seldom suitable for small business owners with little or no accounting experience. In the past the cost of licensing the individual pieces of software to provide a complete accounting solution for the UK contractor market, has been significantly greater than the cost of employing the services of an accountant. That is not the case anymore, Solo’s online software is jargon free, quick, simple to use and substantially reduces the cost.”
The launch of the software is well timed with the introduction of HMRC’s new penalty regime applying to documents filed after 1st April 2009. HMRC will impose financial penalties on a sliding scale up to 100% of any underpayment of tax due, plus interest. In order to avoid the penalties, contractors will now have to demonstrate that they have taken “reasonable care” to firstly, determine their employment status for the purposes of IR35 and secondly, that the expenses that they have claimed were wholly, necessarily and exclusively incurred in the provision of their services. Lastly, “reasonable care” must be demonstrated in respect of keeping adequate records to make sure that tax returns are completed accurately.
With a strong focus on compliance, Solo Accounting have included within the cost of the software a comprehensive review of the contractual terms and working arrangements, ensuring that the IR35 status of the user is clearly determined. This review is undertaken by one of the UK’s leading compliance experts Qdos Consulting Limited. Solo Accounting Limited, provides detailed factsheets on allowable expenses removing the ambiguity and complexity usually associated with obtaining tax relief on expenses. The use of the software eliminates the need of a third-party book-keeper or accountant during the course of the year and as a consequence removes all parties in the contractual chain from the transfer of debt risks associated with the Managed Service Company legislation.
Solo Accounting combines HMRC accredited payroll software with a fully automated book-keeping programme, document management system, management reporting and HMRC approved online filing of returns. It backs this with a £75,000 tax enquiry / legal expenses insurance covering all parties in the contractual chain from the risk of unbudgeted costs in the event of an HMRC tax enquiry or dispute.
With the Government seeking to improve the level of tax compliance in the contractor marketplace and the potential risks to contractors, agencies and hirers, Solo’s solution looks like the way forward for the industry.
For more information ring Simon Fullagar at Solo on 0845 100 5010 or email: info@soloaccounting.com