Don’t get left by the side of the road

Don’t get left by the side of the road

Changes to Travel and Subsistence Expenses are approaching fast

Will you be losing out?

On the 16th April 2014 HMRC published a document called “Employment Intermediaries: Temporary workers – relief for travel and subsistence expenses”. This document described the then collation government plans to eradicate the misuse of travel and subsistence rules.

Who will be affected?

The changes will not affect all contractors, only those who fall under these specific criteria:

  • Workers employed through an employment intermediary, such as an umbrella company
  • A personal service company (inside IR35)
  • A recruitment agency or employment business

Contractors who are under the supervision, direction or control of the client will only be affected. But, what on earth does this mean? Simply put:

  • Supervision is where someone is overseeing your work.
  • Direction is where an individual makes you work in a certain way through instructions or guidance.
  • Control equates to someone dictating what work you are required to do and how.

Why is the change needed?

It came to light that a small number of umbrella companies had been using overarching employment contracts to enable contractors to claim tax relief on their work to home travel expenses – something that is not available to permanent employees.

The government believes that the tax system should be fair to all and under current arrangements some contractors are benefiting from being able to claim tax relief on their journey into work.

Be prepared for when the change happens

The proposed changes will be brought in under the Finance Bill 2016 and will be effective from 6th April 2016.

How will the change affect you? This example will show you:

“Paul is an engineer and works via an umbrella company, he lives in Bicester and travels to Oxford every day to his place of work. He will no longer be able to claim this journey as a travel expense. However, if he needs to travel to London for a one off meeting he will be able to claim his travel costs as a business expense as London isn’t his normal place of work.”

What next?

HMRC predict that the change will affect approximately 430,000 contractors. If you are one of those who will be affected by the change, maybe you should consider forming your own Limited Company.

Forming your own Limited Company maybe a suitable option, if you:

  • Consider contracting a long term career choice, or
  • You rely heavily on expenses.

If you are undecided what your best course of action is, a member of our team will be delighted to talk you through the different options. Give us a call on 0208 952 2234 or request a call back through our website: and a member of the team will get in contact at a time convenient to you.

The love of freelancing

We were lucky enough to take part in a live Twitter chat organised by Freelancing Women and Talented Ladies Club to celebrate International Women’s Day. It was a wonderful opportunity to connect with women freelancers. The main thing that stood out for us was the enthusiasm and passion they have for freelancing.

Freelancers from different sectors were present on the chat but they had one thing in common: they love what they do and would not turn their back on freelancing.

In this article we cover the main points discussed in the chat and reveal some simple but effective top tips.

Building a personal brand is vital 

What is it that makes you different? What is your USP?

It is worth spending some time determining what these are. It could be that you have knowledge or experience in a certain sector or with a particular software. Whatever it is, this should be at the heart of your personal brand.

Communicating your USP through a professional brand image is the next step in the process. This could include getting business cards printed, setting up a website and building a following on social media.

Top tip: Register yourself on a SEO driven directory and were recommended.

Stand head and shoulders above the competition

In a crowded marketplace getting a client to notice you is difficult. Most freelancers’ work comes from word of mouth recommendations. Delivering the client what they asked for (and more if possible) on time and budget will do more for your building reputation than any marketing campaign could.

Top tip: Don’t be shy in asking the client to recommend you to others. If you have done a good job they shouldn’t have a problem doing this.

Dealing with clients expectations

Some clients can be tricky: they expect to receive gold when they only have the budget for bronze! How do you manage this? Be upfront and honest from the start: explain what you can and can’t do, explain what you are doing is right (they are paying for your expertise), show examples of your work and agree on what is to be done at the outset.

Top tip: Ask the client to send you some examples of work they like.

Think about the long term

As a freelancer it can be difficult to plan for the future, as work is often ad-hoc. However, this shouldn’t stop you thinking about the long term and having some sort of revenue target that you want to reach. Carry out a quarterly review of work that you have done to see if there are areas where you could have made savings. Or, speak to other freelancers to see if you can collaborate together so you can work on bigger projects.

Top tip: Know your profit level and keep good accounts! It’s your business you should know how much money you are making.

A passion for your work results in great projects being delivered and a happy balance between your work and personal life. What is there not to love about freelancing. 

If you are thinking about becoming a freelancer and need advice on how to go about this, speak to our team today who will be delighted to explain the different options available to you. 

The Budget 2016: Mostly good and a little bad

On 16th March 2016, the Chancellor George Osborne stepped up to the despatch box to deliver his eighth Budget.

This was arguably one of the most challenging speeches he has had to deliver since he took charge of the Treasury almost six years ago, made in the shadow of economic uncertainty and an imminent referendum on Britain’s EU membership.

Last autumn, Mr Osborne was given unexpected room for manoeuvre by some rather generous forecasts from the Office for Budget Responsibility (OBR). In the last few months however, the economic situation has deteriorated and the Chancellor has breached some of his own fiscal rules.

Addressing the Commons, he emphasised the importance of a long-term plan and said the Government had chosen “sound public finances to deliver security”. Although critics were quick to point out that Mr Osborne had missed his target for cutting the national debt.

Economic overview

Business and enterprise

Transport and infrastructure

Personal tax

Pensions and savings


Tax evasion, avoidance and aggressive tax planning


Economic overview

The Chancellor said that the UK was on course for a Budget surplus (£10.4billion by 2019/20), the economy was growing faster than any other major nation’s and that employment was at an all-time high. He said that this situation had been shaped by the fact that the Government had not sought “short-term fixes.”

But he reiterated warnings earlier this year that the outlook for the global economy was perilous and that Britain must be aware of the gathering storm clouds.

In his opening statement, he confirmed the OBR had revised down forecasts for global growth and UK productivity.

The OBR calculated growth was 2.2 per cent last year and predicts it will be two per cent this year and 2.2 per cent in 2017, although Mr Osborne clarified that their predictions were based on the UK voting to remain within the European Union. Voting to leave would cause “disruptive uncertainty” he warned.

Inflation in 2016 will be just 0.7 per cent, down from the one per cent expected in November 2015.

Business enterprise

Mr Osborne said that Britain already had one of the most competitive tax regimes in the world and now he was publishing a “road map” to make business taxation fit for the future.

A number of changes were announced to business rates, following a review of the current system.

As of April 2017, around 600,000 small businesses will be taken out of business rates altogether, thus saving them in the region of £6,000 annually. A further 250,000 firms will benefit from a reduction in their current rates.

Plans were also announced to reform stamp duty for businesses. He said the changes to rates would mean “big tax cuts for small firms.”

As of midnight tonight, commercial stamp duty will have a zero rate band on purchases up to £150,000; a two per cent rate on the next £100,000; and a five per cent top rate above £250,000.

A further cut to corporation tax was also confirmed, with the rate set to be reduced to 17 per cent by 2020. “Britain is blazing a trail, let the rest of the world catch up,” said the Chancellor.

As had been speculated beforehand, the Chancellor confirmed an increase in Insurance Premium Tax – which will rise 0.5 per cent to 10 per cent. The move, which comes hard on the heels of an increase last autumn, is likely to be unpopular in sectors that will bear the brunt of the changes.

There was also bad news for the drinks industry, with a sugar tax to take effect in two years’ time. The levy is expected to raise £520million, although Mr Osborne said it would be down to manufacturers whether to pass on the price to consumers. Pure fruit juices and milk-based drinks, as well as small producers, will not be affected by the levy.

Outlining plans for further devolution, Mr Osborne said that a new city deal had been agreed with the Cardiff region. Elsewhere the Greater London Authority would move towards the full retention of business rates from next April.

Following recommendations from the Low Pay Commission, the Government will increase the National Minimum Wage rates from October 2016.

Transport and infrastructure

Mr Osborne paid tribute to the work of the National Infrastructure Commission and confirmed plans would advance for the HS3 rail link between Manchester and Leeds.

Further proposals were also outlined to widen the M62 between Leeds and Manchester, and improve the road network in the North Pennines.

Elsewhere, the tolls on the Severn Crossings between England and Wales will be halved by 2018 and an extra £700million will be pumped into resilience and flood defences.

Personal tax

The Chancellor made a surprising number of tax announcements.

The personal allowance will increase to £11,500 from April 2017, which the Government claims will deliver a tax cut for 31million people nationwide.

At the same time the 40 per cent higher rate threshold will also rise to £45,000, a move likely to be welcomed by many of Mr Osborne’s own MPs.

In addition there was the announcement that Capital Gains Tax (CGT) will be cut from 28 per cent to 20 per cent and from 18 per cent to 10 per cent for basic-rate taxpayers

Mr Osborne also announced that he would abolish Class 2 National Insurance (NI) contributions for the self-employed from 2018.

Although a fuel duty increase was being considered for this year, Mr Osborne said that any such rise would place an extra burden on families and confirmed the tax would be frozen for the sixth year running. He claimed that the move would save the average driver £75.

Duty on beer, cider and spirits will be frozen, while tax on other alcohol is to rise in line with inflation.

Pensions and savings

Ahead of the Budget, Mr Osborne had been forced to abandon some of his more radical changes to pension rules in the teeth of fierce opposition from his own MPs.

There was nonetheless an announcement which will enable under-40s to open lifetime ISAs. Under this arrangement, for every £4 a person saves, the Government will give them £1 up until the age of 50.

This money can be used to save for a pension – the Chancellor acknowledged that many younger people are struggling to save for retirement – or to buy a home (people will have the option to roll help-to-buy ISAs into the scheme).

In addition, the annual ISA limit will rise to £20,000 from next year.


As was widely trailed ahead of the Budget, Mr Osborne confirmed that all schools across England would be “freed from local authority control” and become academies by 2022.

Work would continue on making improvements to the current schools funding formula – much maligned by head teachers – and there would be a drive to turn around failing schools in the north.

The Chancellor confirmed that a white paper would be published on 17th March 2016 containing further details about the new education strategy.

Tax evasion, avoidance and aggressive tax planning

The Chancellor announced a series of measures to crack down on tax avoidance and evasion which will total £12billion. These include bringing an end to the use of “personal service companies” by employees in the public sector who are looking to minimise their liabilities.

The Chancellor also said that many firms feel they face unfair competition from online retailers, some of which do not pay VAT. In an effort to address their grievances, Mr Osborne announced he would be closing a loophole used by some overseas internet companies.


This may have been a difficult Budget for Mr Osborne but it wasn’t an uneventful one.

He will hope that changes to the business rates regime and stamp duty will win support among small businesses, with changes to income tax thresholds likely to prove popular with many families.

That said, critics are likely to seize on the fact that the Chancellor has failed to meet debt targets and there will be lingering concerns that the UK is not immune to the uncertainty gripping the global economy.

View official documents and full Statement



Building solid foundations: Investing in property

Thinking of investing in property? Not sure if you should purchase a buy to let property in your personal name(s) or invest through a Limited Company?

Deciding whether to invest in property in your personal name(s) or through a limited company is a complex decision with no simple answer. Both tax and commercial issues should be considered when choosing the most suitable option to minimise tax and get the most out of your investment.

A brief overview of the two different structures:

Personal Ownership (including partnerships and LLP’s)

  • This structure is seen to be more beneficial for short-term property ownership with the intention of making a capital gain, have access to the rental income or if the individuals owning the property are basic rate tax payers with a small portfolio.
  • Individuals personally owning a property are subject to Capital Gains Tax on the profit on the sale proceeds less the original cost (18% for basic rate tax payers and 28% for higher rate tax payers). Individuals can use their annual CGT allowance currently £11,100 per person (where property is jointly owned by husband and wife or civil partners, both parties can make use of their allowance).
  • It is important to remember that any rental income is taxable at the individual’s highest rate of tax, if jointly owned the property is assumed to be owned in equal shares.
  • Currently landlords can offset mortgage interest against their tax bill and also claim for wear and tear but from April 2017 landlords will be limited to the amount they can claim as relief on mortgage interest to the basic rate of tax thereby reducing profits.
  • Raising finance is easier and cheaper as the vast majority of buy to let lenders will only lend to people who buy properties in their own names. (Commercial lenders / mortgages are more flexible in this regards but usually charge higher rates).

Limited Company Ownership

  • This corporate structure is more beneficial for long term investment, as this could reduce your tax bill, often with profits being retained to purchase additional properties.
  • Corporation tax (currently 20% reducing to 19% in 2017 & 18% in 2020) will be payable on the rental profits. However, when disposing of the property the company will have to pay both the corporation tax and further tax if they wish to withdraw the proceeds from the company by way of dividend at the Directors highest rate of tax. The new dividend rule in April 2016 will potentially make it even more expensive for Directors to withdraw profits from the company.
  • Company ownership gives greater flexibility in sharing ownership.
  • Mortgage providers are less willing to offer mortgages to Limited companies and can make funding the acquisition more expensive and difficult.

How easy is it to switch properties to a company? 

It is not easy to transfer personally held properties into a company and any transfer is usually considered a disposal for capital gains tax purposes. There may also be a potential stamp duty charge for any properties worth more than £125,000. So it could cost more to transfer the property than the possible tax savings of owning the property via company. In most circumstances, landlords would be better off by retaining the current structure and purchasing future properties via a company.

Which route should you take?

Which is the best route to take? You can see that the decision to hold property directly or via a company is not necessarily a straightforward one and it depends who you are and what you plan to do.

If you would like further information about this topic or to talk through your options please give us a call on 0208 952 2234 or request a call back through our website and a member of the Cogent team will get in touch at a time convenient to you. 


Numbers Matter

Research carried out in 2014 showed that only 30% of company directors in the UK are women. This figure covers sole traders, SME’S and multinational organisations.  We believe this number needs to be higher.

Numerous factors put women off becoming company directors, these include: lack of time to dedicate to running a company, family commitments and a lack of support network. It’s true that running your own company and turning it in to a success takes dedication, time and commitment but it if you are prepared to put in the hard work and make sacrifices along the way great success will follow.

We spoke to three women who are directors of their own companies to find out their stories:

Louise. 42. Director of a renewable energy firm. 

Louise, along with her husband is a joint director of a renewable energy firm based in the South of England. The company started 10 years ago from their garage.  They now employ around 20 people and provide renewable energy solutions to businesses and households all over the UK.

As a director she is able to decide her own working hours so they fit around her 2 children. This enables her to do the school drop-offs and work from home occasionally.

Louise explains that being a director of the company is a huge commitment and the responsibility can be stressful but having spent 16 years working for other people, being your own boss is incredible  and very satisfying.

Jai. 40. Director of a IT Consultancy business. 

Jai’s first job after graduation was at a global trading firm in the City. As one of only four women in the team it was a challenge and not one for the faint-hearted.  Jai thrived off this challenge and worked her up to become IT Director overseeing a team of 50 people.

After 10 years of running the ‘rat race’ her priorities changed. A personal health issue made her change the way she saw her life. In 2010 she left the City and set up her own IT consultancy business. She runs the company from her office at home, where she works on projects for financial institutions based all over the world.

She describes her work life balance as 100% improved and her stress levels have decreased considerably due to not having to face the 2 hour commute every day.  In her own words she says she is a “social bunny” and thrives off personal interactions, so working on her own can be a little lonely. To counteract this she schedules in meetings with clients in London for at least twice a month.

She goes on to say that working for yourself isn’t for everybody but if you feel you can do it, go for it!

Clare. 45.  Director of events firm. 

Clare’s working history is varied to say the least. She has done everything from selling fish and chips on a stall in Brighton to teaching drama. Clare says that she never knew what she wanted to do in life but the one thing she did know was she wanted to be her own boss.

In 2005 she was given the opportunity to set up her own events firm. Having no experience at all in the events industry deciding to take this on was a leap of faith.

She says she had to learn on the job and at first she made many mistakes and worked long hours. Nearly 11 years on she now employs a network of 10 staff who specialise in organising high end events for corporations throughout the South East.

Her piece of advice for anyone thinking of venturing out on their own is: “Think about it, plan it and go for it as the opportunity may not come along again.”

If you are thinking of forming your own company and are not sure where to start our experts will be delighted to talk through the different options available to you.