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IT contractors 'must use correct bonus terminology'
IT contractors must be careful what terminology they use when negotiating bonus payments with employers.
According to Andy Vessey of Qdos Consulting, simply mentioning the word 'bonus' on a contract can be enough to see HMRC launch a full IR35 investigation.
Speaking to Contractor Calculator, Mr Vessey said that this word is associated with employment and thus attracts unnecessary scrutiny from HMRC.
Instead, IT contractors should be sure to refer to an 'incentive' or 'completion payment' on their paperwork.
Professional contract reviews are also a good idea, according to Mr Vessey.
"In addition to correcting the terminology, a contract review will also confirm that the incentive payments are specifically related to a project and will only be paid on completion of milestones," he added.
The government has repeatedly assured IT contractors over the 100 days that it has been in power that a new, simpler tax system will be brought in to replace IR35.
According to Andy Vessey of Qdos Consulting, simply mentioning the word 'bonus' on a contract can be enough to see HMRC launch a full IR35 investigation.
Speaking to Contractor Calculator, Mr Vessey said that this word is associated with employment and thus attracts unnecessary scrutiny from HMRC.
Instead, IT contractors should be sure to refer to an 'incentive' or 'completion payment' on their paperwork.
Professional contract reviews are also a good idea, according to Mr Vessey.
"In addition to correcting the terminology, a contract review will also confirm that the incentive payments are specifically related to a project and will only be paid on completion of milestones," he added.
The government has repeatedly assured IT contractors over the 100 days that it has been in power that a new, simpler tax system will be brought in to replace IR35.
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