Important changes in the new tax year

The new tax year is here and it has brought with it the usual soup of tax and regulatory changes. This year there are a number of important changes that will affect contractors, including new IR35 rules, changes to the flat rate VAT scheme and new income tax rates.

Some of the changes will be received positively – others, less so. Here we summarise the most important April changes for contractors. 

18 perks employees get that freelancers have to pay for
Editor | 24 March 2017
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Freelancers and self-employed people will be well accustomed to criticism from employed friends and colleagues.

Philip Hammond’s final Spring budget statement was met with fury from the self-employed community when the Chancellor broke a manifesto promise and increased taxes on the self-employed.

PPI Deadline: Only 1 in 5 PPI policies checked

At the same time as setting a final deadline for claims, The Financial Conduct Authority (FCA) has admitted that as few as one in five payment protection insurance (PPI) policies have been claimed for so far.

After 29 August 2019, consumers who were mis-sold PPI won’t be able to make a compliant, meaning they could miss the opportunity to claim back thousands of pounds of compensation.

The FCA revealed that only 13 million genuine PPI complaints had been made so far, while they estimate that up to 64 million PPI policies were sold between 1990 and 2010.

Although it is unclear how many of these policies were mis-sold, the 2019 deadline gives a very large number of complainants little over two years to make a claim.

Editor | 24 February 2017
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A team of thirty personal service company (PSC) contractors have agreed to abandon an already overrunning NHS IT project, after the Guy’s & St Thomas (GSTT) hospital trust said that the contractors would be declared ‘inside IR35’ from April.

Editor | 3 April 2017
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There will be a number of things changing this April, some of which will affect them negatively.

We assess the changes and suggest some tax-efficient ways for contractors to respond.

Self-employed welcome Chancellor’s ‘screeching’ U-turn

Chancellor Philip Hammond has been forced to make a ‘screeching’ U-turn on National Insurance contributions (NICs) for the self-employed.

In his budget statement last week, the Chancellor said that he wanted to increase Class 4 NICs, which are only paid by self-employed workers, by two pence in the pound in 2019. 

Following heavy criticism from Tory backbenchers, the media and the self-employed community, the Chancellor has dropped this policy.

The SNP leader in Westminster Angus Robertson called it a “screeching” U-turn while Labour said the move was “humiliating”. 

Tool: Check your IR35 status before April

HMRC has launched a new tool designed to help contractors, and those that engage them, decide a worker’s IR35 status.

But with less than a month to go before a fundamental change in the way IR35 rules are applied, some experts have found cause for concern with the Employment Status Indicator tool.

A contractor’s IR35 status is all about whether the contract they are working on should be considered employed or self-employed for tax purposes. The Employment Status Service is supposed to give HMRC’s view of whether a contract is inside or outside IR35.

This will be of particular interest to limited company contractors working in the public sector because, from April, it will be the public sector organisations that decide on IR35 status instead of the individual. 

April IR35 Changes. Now is the time for public sector contractors to act
Editor | 27 February 2017
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Changes are coming to Public Sector contracting in April 2017.

The key area which could affect your company in April will be the following;

Change
From 1st April this year many Limited Company Contractors working on a contract for a Public Sector institution will be classed as “Inside IR35” which means that the income from that contract will be taxed as if it was employment income. This can drastically increase the tax burden on the company.

Cloud based Todoist is a real life saver

With the pace of life currently the way it is it can be difficult to stay on top of everything at any one point in time. As a contractor you’ve also got bills to pay, forms to file, returns to authorise and money to chase.  We have found that the on-line cloud based to-do list todoist  is a real life saver when it comes to helping you out.

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