It only takes a few minutes to help stop the off-payroll tax

It only takes a few minutes to help stop the off-payroll tax

Nigel Scragg, a contractor, has decided to take the Government head on over IR35 and has launched a public petition to get the matter discussed in Parliament.

So far Mr Scragg has managed to secure over 25,000 but will need to gain 100,000 if the matter is to be debated in the House of Commons.

His petition states: “Freelance workers and contractors have been treated unfairly by this ill-conceived legislation since it’s conception.

“It has been incorrectly used to investigate and prosecute many hardworking self-employed business owners, striving to be successful in today’s world. IR35 is anti-business!

“This is legislation that encourages envy because of supposed benefits to being self-employed by some who are not self-employed themselves.

“Why should a self-employed person working under IR35 be treated the same as an employee regarding taxation? The self-employed under IR35 are not entitled to paid holiday or sickness and by implication have no job security.

“HMRC make more money from VAT, Corporation Tax, Income Tax and Dividend Tax than from PAYE. IR35 is about discouraging strivers!”

In response, the Treasury has issued a long statement on behalf of the Government, part of which reads: “The off-payroll working rules do not apply to the self-employed. They ensure that individuals who work like employees but through their own company pay broadly the same taxes as the directly employed.

“The off-payroll working rules have been in place for nearly 20 years. They are designed to ensure that individuals working like employees, but through their own limited company, pay broadly the same tax and National Insurance contributions (NICs) as those who are employed directly.

“The rules support a fair tax system by ensuring that two individuals working in a similar way for the same employer pay broadly the same tax and NICs, even if one of them structures their work through a company.

“The rules apply only to individuals who are working like employees through their own company and do not apply to the self-employed.

“Non-compliance with these rules is widespread. HMRC estimate that only 10 per cent of those who should be applying the rules do so.

“People who are not complying with these rules are not paying their fair share of employment taxes resulting in projected costs to the Exchequer of £1.3 billion a year by 2023/24. This money would otherwise go into funding hospitals, schools and other public services.”

We at Cogent recently joined hundreds of campaigners outside Parliament to protest against the off-payroll tax planned implementation in April 2020 – we would strongly advise that you sign this petition by clicking here.

MTD – Making Tax Digital

You may have seen or heard about MTD. Certainly, it’s been advertised, advertised and advertised some more. I’m bored with seeing it in the press, hearing it on radio and even seeing adverts on primetime TV.

What is it?

  • It’s HMRC’s biggest change since self-assessment tax returns.
  • Some businesses have to supply data to HMRC digitally through dynamic data uploads.
  • It’s compulsory and started in April 2019.

What are Cogent doing about it?

  • Everything and nothing!
  • Everything – that has to be done for our clients to be compliant with the latest HMRC rules has been take care of.
  • Nothing – that any client has to do.

We are always up to date with regulations and try not to make a fuss and worry our clients.

So, when you hear colleagues taking about MTD or hear advertising, you can be confident and even a bit smug that Cogent has it in the bag.

Whatever IT is!!

Victor Korman
MD (managing director NOT made digital)
Cogent Accountants

Freelancers struggle to switch off while on holiday, according to new study

Around 43 per cent of freelancers said they have felt the need to hide holiday time from clients over fears that they may be considered unreliable, according to new data.

The study, conducted by HoneyBook, also found that 92 per cent of freelancers continue to work when they are on holiday.

Unsurprisingly, of those who work while they are meant to be off, 41 per cent admit to hiding their work from friends or a partner.

When asked, the majority of the 800 self-employed workers surveyed said they work on holiday because they felt that they had to.

During their time off, most male freelancers spent time indulging their hobbies, while women tended to use their time to take care of a child.

The trend of working during a vacation was more prevalent amongst older people (24 per cent) than amongst millennials (11 per cent) and Generation Z (9 per cent).

Self-employed workers get pay boost thanks to the minimum wage

New research has indicated that above-inflation increases in the national minimum wage (NMW) has helped to boost the pay of self-employed workers.

The Resolution Foundation has revealed that while self-employed people are not entitled to be paid the legal minimum wage, annual rises in statutory pay has had a direct impacton them.

When the NMW was introduced, some experts predicted that it would have a negative impact on employment, forcing more people into self-employment.

While there does appear to be a correlation between increases in the minimum wage and rising self-employment, it is not clear how the two are connected.

The report from the think tank said that self-employment has grown fastest in some higher-paying sectors like finance and publishing but has fallen in other lower-paying industries such as agriculture, care and sales occupations.

Nye Cominetti, Economic Analyst at the Resolution Foundation, said: “One of the fears about the introduction and ramping up of the minimum wage has been that it would push low-paid employees into self-employment, where they’d have fewer rights at work and no entitlement to a legal wage floor.

“But in fact, the minimum wage appears to have had more of an effect on the earnings of the self-employed than it has on driving up self-employment.

“Much like employee pay, self-employed earnings have grown fastest at the bottom since the introduction of the minimum wage 20 years ago.

“Today, the most common hourly pay rate for self-employed workers is the same level as the national living wage.

“With over a third of self-employed workers still in low pay last year, policymakers need to respond to the risks they face, including better statutory rights to help offset their highly volatile incomes, and more savings support.”

50-year-old message in a bottle washes up in Australia

A message in a bottle, thrown into the sea more than 50 years ago by a young British traveller, has washed up on the shores of Australia.

When 13-year-old Paul Gilmore threw his message over the side of a ship in 1969, little did he know that five decades later, nine-year-old Jyah Elliott would find it on Talia Beach in South Australia.

News of the find was shared by the boy’s mother, Carla Elliott, via Facebook in hopes of finding it’s author.

Paul Gilmore’s sister, Annie Crossland, eventually came forward but revealed that her brother was unavailable as he was once again at sea, this time enjoying a cruise in the Baltic.

It was revealed that the original message was dropped in the Indian Ocean during the family’s emigration to Australia in hopes of finding a new friend.

The letter gave the ship’s location as “1,000 miles east of Fremantle, Western Australia” the intended destination of the voyage and asked for the recipient to “Please Reply”.

He had sent six bottles from the TSS Fairstar, so others may one day wash up on another beach if they haven’t sunk to the bottom of the sea.