Recent Articles
Should Agency Workers Be Subjected to PAYE?
Oct 19, 2011 Taxes Leave a comment
HMRC lost another case in their fight to reclassify workers when the Upper Tribunal upheld a decision of the First-tier Tribunal. The decision was that workers supplied by Talentcore Ltd to act as consultants in duty free shops at airports were not employees of the company. The reason was the workers had an unfettered right to substitution, even though they were subject to, or to the right of, supervision, direction or control as to the manner in which their services were provided.
The company carried on the business of supplying individuals for counter and promotional work to major cosmetic companies in the duty free shops at airports. The company had a database of about 100 individuals whom they supplied to the cosmetics companies and who were referred to as consultants. Unusually there was no framework contract in place between the company and the consultants and the company was free to offer work to the cosmetic companies or not to. The consultants were free to accept or decline work when offered; there were no written contracts between Talentcore Ltd and either the cosmetics companies or the company World Duty Free which ran the duty-free shops.
World Duty Free that operated the duty-free shops were in a position to give directions to the consultants. The consultants worked alongside World Duty Free staff and were subject to the same control as other staff. The cosmetics company was invoiced by the company who attached a list of the people and time worked; the consultants were then paid by reference to the time sheets. Consultants who were unable or unwilling to work an agreed slot were expected to inform the taxpayer and if possible find a replacement.
The First tier Tribunal allowed the company’s appeal against assessments to PAYE tax and National Insurance contributions issued on the basis that the workers were employees of the company. HMRC appealed this decision.
The point at issue was whether the proper interpretation of the statute was that the agency workers were employed by the company for the purposes of income tax and national insurance.
The Upper Tribunal dismissed HMRC’s appeal saying that none of the relevant legislative provisions would apply if the individual was not (a) providing, or under an obligation to provide, personal services; or (b) subject to (or to the right of) supervision, direction or control as to the manner in which those services were provided. The Tribunal found that the second of those conditions was satisfied but that the first was not.
In this case, there was no framework contract and each (oral) contract was for a specific shift. The Tribunal held that under those contracts the consultant’s basic obligation was to ensure that the shift was covered, either by himself or a suitable substitute. The fact that the original consultant had complete freedom to arrange for a substitute if he wished, even if he did not actually do so, constituted an unfettered right of substitution.
The statutory provision only applied for tax purposes if the services were supplied under the terms of a contract made between the worker and the company under the terms of which the worker was obliged personally to provide services to the company’s client.
The contract was entered into before the consultant started to work the shift to which it related, possibly days or weeks beforehand, and it was not replaced by a new and different contract once the consultant started his shift. It was held that how the contract was performed did not alter its terms.
How to Cut Back on Social Security Taxes
Oct 2, 2011 Taxes Leave a comment
Nowadays, Social Security is taxable; something that came about only recently. Most people have yet to know this and only do so when they start getting their tax bills. Taxes on Social Security occur when an individual spends more than what is legally allowed. It always comes as a disappointment to many people given that they always tend to think that it is a tax- free fund. To be on the safe side, one should pay close attention to why these funds are taxable. Prior knowledge equips beneficiaries of Social Security funds with knowledge on how to avoid tax, and how to claim tax relief related to the funds.
- Income sources: Source of income determines whether a person is eligible to pay interest on retirement insurance or not. For calculation purposes, income is considered from the basic level. It is then added to investments that one may have made and which are tax free. All expenses not related to domestic consumption or academic purposes are deducted from the figure obtained. There is an IRS sheet that is used to determine how much tax one should pay, given the different income levels.
- If an individual wants to pay less tax, he/she should avoid placing dividends and interest together with income figures. Dividends and interests increase tax amounts owing to their increase effect on income levels. It is important to scale down income figures if the ultimate goal is to obtain a lower figure on Social Security taxes. Taxes have been paid for any years, but many people agree that it sometimes the Internal Revenue Service is not fair on some tax levies, especially if applied on basic things like Social Security funds.
- One has to take interest to know how the modalities of Social Security systems. Social Security funds are used drive people to save for retirement purposes. They are designed to cater for people’s needs when retire from active employment. There are many factors that can affect payment of taxes related to retirement insurance and so one has to get reliable information about their application. One can visit the client support department of the Internal Revenue Service in order to obtain relevant details.
Anyone who has been paying taxes to IRS is eligible to claim deducible taxes. This applies to both married couples and single individuals. All incomes are reviewed and the correct tax figure reached upon using the MAGI.
Be an Informed Consumer – Understand Those Student Loan Terms Before You Sign
Sep 25, 2011 Student Loans Leave a comment
The smart thing to do before you actually accept a student loan would be to read the fine print – the student loan terms and conditions. You do have a choice to shop somewhere else if the terms of your loan seem unfair.
The thing is, people spend the best years of their life paying off their student loans. These aren’t years that you want to waste on an unfair contract. The more careful you are signing the contract, the better it’ll be over the long term.
Let’s take a quick look at some of the student loan terms that you’re likely to come across on any kind of student loan, and see how you should assess them. This isn’t really a very complete list though. It just touches on the most important points. Before you actually sign a contract, you should probably talk to your school’s financial aid administrator to really understand your contract.
Let’s start with the interest rate – something that most people agree is the most important part of your loan. This is the percentage of your actual loan amount that you will pay them every month for the privilege of using their money. Now the rate may either be a fixed percentage or it may be a variable sum – where they reserve the right to change the interest rate from time to time. And they may charge interest on the main loan alone or the loan plus other fees added.
Should you be alarmed if it’s a variable term interest rate? Federal Stafford loans usually use variable rates. But just because it’s variable, doesn’t mean they can put in any number. They usually specify how high it can go. When the interest rate kicks in, some loans will charge you interest only once you graduate. Others will charge you interest from day one. Make sure you understand all the student loan terms to do with this.
Every loan on earth comes attached with a few charges and fees. And student loans are no different. You’ll find that the point at which you actually receive your loan, they charge you something called origination fees. Sometimes they charge you this when you actually begin to repay the loan. And there will be penalties for when you miss a payment come the day that you begin repaying your loan.
You need to take a look at your student loan terms to find out if they take these fees out of the loan that they’re giving you and only give you the remainder. Other lenders will just add the amount of the fees to the loan. And you have to pay interest on that too. That isn’t a very pleasant prospect, needless it is to say.
How to Use Cosigners With Student Loans
Sep 10, 2011 Student Loans Leave a comment
When a student is preparing to go to college, one of the biggest questions often becomes, with what money. Some parents scrimp and save for years for their children’s college fund; others address more immediate concerns as their children grow up and fall short when the time comes. Some students may have some of the money to pay for college, while other have little to nothing. The most popular ways to cover the costs are through scholarships and grants, because the money does not have to be repaid. When this is not an option or it is not enough, a student loan may be an alternative. Sometimes the student can accept the responsibility of borrowing and paying back a college loan; sometimes, however, they can’t. Either way, the student’s parents, grandparents or legal guardian may consider cosigning on the loan.
Terms
When someone cosigns with someone else, they agree to take responsibility for the loan if the primary borrower fails to make payments on time and in full. Depending on the financial stability of the potential cosigner and the trustworthiness of the student, there may or may not be anyone willing to cosign the loan. In some cases, the person does not have stellar credit and does not want to put it at further risk. In other cases, they may not have the financial abilities to agree to another payment should it be necessary. When they do agree to cosign, the complexion of the loan changes; sometimes dramatically.
Approval
When a student has an established adult cosign on the private loan, it often improves the chances of the application being approved. With two individuals instead of one to look to for payments, the applicant is a better risk for the lender.
Interest
Some lenders will lower the interest rate for parent-student loans. This not only encourages the parent to cosign, it places a lower risk on the account. Lowering the interest rate further improves the chances of prompt repayment.
Release
In some cases, the student is able to get a cosigner on the account. If circumstances change and the borrower feels that they can handle the principal and interest monthly payments, it is possible to apply for a release for the cosigner. For example, the borrower may be required to make 24 consecutive payments on time and in full before the cosigning responsibilities are lifted.
Regardless of the final outcome, having someone cosign a loan sometimes makes the difference between someone going to college and staying home or working at a lower paying job.
Structured Settlement Sales Professionals
Aug 28, 2011 Structured Settlements Leave a comment
Introduction
The main way to providing quality services to clients in the annuity sector is to have structured settlement sales professionals who are able to guide clients with whatever query they may have. Personality and approach towards the client is considered very critical in business. The client should not feel he is being forced to a corner but he is gaining vital information from the sales person representing a company. Sales men have unfortunately built a bad reputation since they have been associated with badgering clients into making decisions they have not thought over, “just to get that sale.”
Sales Professionals
This attitude has makes many people avoid sales men altogether and will even reject a product they require just to get the salesman away from themselves. Top companies in the business will enroll only the best structured settlement sales professionals who have receive professional training and instruct them not to force any client in to making a decision. These forced decisions do not work to the interest of the structured settlement buyers; in turn it gives the company a bad name in the market. Clients affected by the badgering clients tend to spread bad experiences they had with a company’s sales men which spreads and affects its future business transaction.
Since the sales man plays a major role between the companies and the client there are some problems that need to be identified and solved to stop this downward trend that grips the sector. The main problem identified being target pressure to make sales, this pressure that companies exerted on salesmen makes them force clients in to these decisions.
Remuneration Factor
Salary/wages is another major constraint that makes them push for more sales. Since companies promised commissions for added sales they sparked a vicious cycle that ended up tarnishing sales men reputation and image in the general society. To stop this from happening companies have adopted radical changes that are aimed improving and changing attitudes of the public towards structured settlement sales professionals.
A different approach has been adopted today with companies diverting attention from door to door to marketing and concentrating more on marketing services and products on the internet. This reduces the pressure on sales men who then can concentrate on advising the clients correctly rightly without placing pressures of targets on their minds.
Current Scenario
Today there are more people spending time on the internet and it provides a wider audience to advertise to as well as being cheaper for the business. These factors have been used by many businesses today to improve sales since it not only advertises you company nationally but internationally as well. Most people who have access to the internet will resort to it when they require selling or buying a product. So instead of looking for them the game has changed to advertising so that when they look they can find you on Google first page.
