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Since almost all of the potential customers for
Independence™ will be affected by IR35, all the consequences of this iniquitous
impost will be catered for. Details are still rather
vague, but it seems that the main requirements will be:
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The facility to mark Contracts as ‘self-employed’ or not?
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The ability to link revenue to Tax Year as well as Financial Year / VAT Quarter.
This is based on payment receipt date;
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Attach Purchase Invoices to Tax Year; as well as Financial Year / VAT Quarter.
This is based on payment date.
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Divide Cost Codes between Allowable Expenses (very few) and those which must be
contained within the 5% limit; assign expenses to a particular person.
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Produce report showing revenue from non-self-employed contracts and compare Year to
Date figures with salary paid and allowable expenses; compare non-allowable expenses
incurred against 5%, This must be done separately for each person.
An example of this report can be seen here.
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Calculate the outstanding NICs and Income Tax
at the end of the Tax Year and include the amounts in the final
payment of deductions. This must be done separately for each person on
a cash basis. Also include these amounts in totals on P35,
P14/60 etc.
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Calculate the outstanding NICs and Income Tax
from figures entered from other sources. The final amount of deemed
salary is calculated together with both sets of NICs and Income Tax.
see an example here.
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Since things are still unclear, the facility
is also provided to switch on and off the need to complete the IR35 data
e.g. the person for allowable expenses. When it is switched back on all
relevant data is presented for the extra fields to be completed.
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This sounds complicated, but since Independence™ uses a fully-normalised
Relational Database and already includes Payroll facilities as well as Sales
Ledger, it is simple (for you).
You will need to mark each Contract as either 'Employment
Type' or not (once only) and analyse the expenses into the correct
category. It even allows for partial deductions e.g. if it were decided that you
could deduct 50% of Training costs. You will also have to use the Payroll functions, otherwise Independence™
will not know how much salary you have already paid yourself.
Inevitably, changes will be necessary as the rules are
clarified. So all necessary changes during the first year after purchase are included in the
purchase price. After that time the Support Service may be purchased as usual.
If you use the Subscription
option, changes will be sent to you automatically.
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