Stop The Off-Payroll Tax: MP lobby day at Westminster on Tuesday 9th July – see details below

Stop The Off-Payroll Tax: MP lobby day at Westminster on Tuesday 9th July – see details below

We will be there – We hope you will join us – Together we can make a difference

The Stop the Off-Payroll Tax is taking it’s message to Westminster on Tuesday 9th July and is calling on contractors and campaign supporters to join them at the event.

It is calling on workers within the sector to meet them at Westminster at 2.15pm and is asking them to contact their MP and inviting them to attend.

If you don’t know who your MP is or need their email, you can locate your MP here.

The leaders of the campaign are also calling on contractors to ask for meetings with their MPs as well as asking them to meet you in Westminster.

If you can’t join us or meet with your MP, the campaign is also looking for people to write to their MPs and put pressure on them to take action. To help you, you can find an email template here.

We want to see more MPs understanding this issue and showing their support, so if you haven’t already done so, please ask your MP to sign Early Day Motion 2379 opposing the Off-Payroll Tax. The EDM is here so please lobby your MP.

The campaign is hoping to collect a dossier of responses from MPs and has asked that those taking to email

Industry members, including our team at Cogent, have made representations to HMRC via the campaign, which aims to prevent the new rules for the private sector going ahead next year.

It is asking for a review of the current legislation, in order to work out how to recognise contracting fairly within the tax system.

A summary of all the responses to the HMRC’s consultation ‘Off-Payroll working rules from April 2020’, which are very critical of the ill-considered plans, can be found here.

As an industry likely to be severely impacted by these changes, now is the last time to have your say, so why not take part in this campaign to apply pressure on the Government.

Employment agencies take part in IR35 consultation to shape it’s future

Members of the Association of Professional Staffing Companies (APSCo) have taken their time to feed their thoughts into the trade body’s official response to HMRC’s latest consultation on the implementation of the IR35 off-payroll rules for the private sector.

At three special working groups held in Manchester, London and another which was tailored for the trade body’s group of largest members, more than 87 APSCo members made their feelings clear about the controversial rules.

The Association also received written feedback from a further 51 members and spoke with many people in the industry at members’ meetings and forums during the consultation period.

During these events, members flagged up common concerns, including:

  • Where liability sits in the supply chain
  • When and how status determination should be made
  • Communications to recruitment firms and workers
  • The likely increase in demand for fixed-term project/statement of work services
  • How recruitment firms can best prepare for the roll-out

Tania Bowers, General Counsel at APSCo, said: “APSCo members certainly stepped up to the plate in terms of engaging with the consultation.

“While the professional recruitment community generally maintains that extending public sector rules to the private sector is still not a preferred option and remain concerned about the industry and it’s client base being ready for next April, through engaging with the consultation process, we can at least influence how these changes are implemented.

“We hope that HMRC has the good sense to consider, and take heed of, the concerns and advice offered by those who know what’s happening on the ground. We look forward to seeing how our insight will shape the draft legislation which is expected to be published at the end of next month.”

CIOT calls on HMRC’s to improve CEST tool

Chartered Institute of Taxation (CIOT) has called on the in Government to make improvements to it’s online assessment tool for off-payroll working, warning that the new rules won’t operate effectively without it.

The Check Employment Status for Tax (CEST) tool has been developed by HM Revenue & Customs to help employers identify those contractors and consultants caught within the IR35 rules.

However, the CIOT said that the system needed to be significantly improved if the rollout of the off-payroll working rules to the private sector is not to lead to uncertainty and protracted disputes over tax status between businesses and workers.

HMRC have recently lost a number of tribunal cases on off-payroll working rules in the public sector, including the high-profile cases of Lorraine Kelly and Kaye Adams, and the tax authority has been forced to admit that the CEST tool only provides an accurate determination in 85 per cent of cases.

The CIOT has made a number of representations on the behalf of it’s members in HMRC’s ongoing consultation on how the off-payroll working rules will apply from 6 April 2020 when the plan is to extend them to all sectors (except small businesses).

Launched in April 2017, the CEST tool was designed to help businesses and workers decide the employment status of their engagement, but the CIOT says that it does not factor in all the criteria established by case law before it’s algorithms reach a decision on whether IR35 applies.

Capital Gains Tax on residential property

Former Principal Private Residence

If you are considering selling a rental property which at some point has been your principal private residence, there are substantial changes coming in April 2020 to the tax reliefs available.

Currently, the capital gain for the whole period of ownership is time apportioned between the months when it was your home and the months when it was a let property and you are not charged capital gains tax on the home portion and up to an additional 18 months at the end.

In addition to this Private Residence Relief, there is currently also something called Lettings Relief of up to £40,000 available to reduce the CGT tax bill where a private home has also had a period of being let.

From 6 April 2020, the final period exemption is reduced from 18 months to 9 months and in most cases the Lettings Relief goes altogether.

This means that there is the potential to be charged tax on an additional £40,000 on a let property sale which takes place after 5 April 2020 rather than before, plus an additional 9 months of time apportioned gain.

So, if you are considering selling a rental property which partly qualifies for Private Residence Relief, you may want to do it sooner rather than later.

It is worth noting that for CGT purposes the date of sale is generally the date when contracts are exchanged not the date that the sale is completed.

Overseas matters

If you are non-resident or temporary non-resident, the sale of a residential property needs to be reported on a non-resident Capital Gains Tax return within 30 days of the property being conveyed. Late returns will incur late filing penalties. Please note this is in addition to reporting the disposal on your annual self-assessment tax return. The online non-resident form for reporting the disposal of UK residential property is very complicated and if you find yourself in the position of needing to file one, you will probably need specialist advice.

And Finally…

Safe locked for 40 years opened on first try

Last opened in the late ‘70s, the large safe located at Alberta’s Vermilion Heritage Museum had always posed a challenge to visitors, with thousands trying to crack the code and gain access to what was inside.

Taken from a local hotel, the contents of safe remained a mystery to guests, as well as staff, who hadn’t managed to crack the code.

However, last month Canadian Stephen Mills walked up to the large 2,000lb metal safe and cracked it on his first try.

Mr Mills was being shown around the museum by guide Tom Kibblewhite, who explained it’s history and the many attempts that had failed before, but he decided to have a go at opening it “for a laugh”.

Seeing that the safe’s combination dial ranged between zero and 60, Mr Mills thought that 20-40-60 might be a good bet and to his surprise, the door of the safe opened.

He said: “I cracked it, it opened, and it was just total disbelief. Tom was equally surprised; the whole family was. It was great. The kids got excited, they were like ‘we beat it, we beat the code!’

“I could tell it wasn’t opened for a long time because some dust fell out from the locking mechanism.”

Prior to Mr Mills attempts, museum staff had tried default combinations and even asked experts to try to crack the code. They also contacted former hotel employees to see if they could help, but to no avail.

So, what was in the mystery safe? Unfortunately, not the riches that everyone had hoped for. Instead, it contained an old pay sheet and part of a restaurant order pad dating from the late 1970s, which listed a mushroom burger for C$1.50 (59p) and a package of cigarettes for C$1.00 (40p).