The government’s Good Work Plan looks favourable for contractors

The government’s Good Work Plan looks favourable for contractors

Details on the government’s plans to change employment laws in the name of making work in the UK “fair and decent” for all have been released. The so-called Good Work Plan focuses on plans to protect contractors, gig economy workers and the flexible workforce in today’s economy.

Labour Politician, Matthew Taylor, authored a list of 53 suggestions in an independent review in 2017, all but two of which appear to have been adhered to by the government which states that the Prime Minister “will not only maintain workers’ rights as the UK leaves the EU but enhance them.”

The government promises to “improve clarity on employment status, reflecting modern working practices,” which they hope will ease the burden of unclear employment statuses suffered by self-employed contractors.

Employment experts are concerned, however, that employment rights are not desired by all workers and that the labour market should be kept balanced. They believe that, in general, contractors prefer working outside of IR35 and don’t think of themselves as vulnerable.

The Good Work Plan acknowledges the differences between contractors working inside the IR35 and those working outside and has promised to explore the alignment of tax status and employment rights as an option.

John Cullinane, Tax Policy Director at the Chartered Institution of Taxation does believe aligning tax status and employment rights would be easy, he has said: “It is difficult to see much progress being made on aligning and simplifying employment and tax frameworks within the constraints the government have imposed on themselves. We have three different categories of workers (employed, worker or ‘dependent contractor’ and self-employed) for employment law but just two for tax (employed and self-employed).”

Either way, it may be pleasant news for contractors that the government is looking into ways to make working fairer for them.

And finally…

Upon returning from a visit to China, a 60-year-old Taiwanese woman has been stopped at customs with 24 gerbils strapped to her legs.

The woman was stopped by Coast Guard officials after she was spotted walking in an awkward fashion through the airport on the Taiwanese Island of Kinmen.

After being pulled aside for questioning, 24 individually wrapped gerbils were found to be strapped to the woman’s legs and covered by a skirt.

Local news station 97x were reportedly told that the gerbil smuggler was bringing the animals into the country to give to friends after purchasing them in China. However, authorities suspect that the reasoning was a more sinister test of inspection procedure.

Taiwanese police charged the woman with violating the Infectious Animal Disease Prevention and Control Act.

COGENT HOLIDAY OPENING TIMES

Thursday 20th December 9.00am – 5.00pm
Friday 21st December 9.00am – 3.00pm
   
Monday 24th December 9.00am – 1.00pm
Tuesday 25th December CLOSED – Christmas Day
Wednesday 26th December CLOSED – Boxing Day
Thursday 27th December CLOSED
Friday 28th December CLOSED
   
Monday 31st December CLOSED
Tuesday 1st January CLOSED – New Year’s Day
Wednesday 2nd January 9.00am – 5.00pm
Business as usual thereafter. Happy New Year!

Send us your Self-Assessment Tax Return Questionnaire by 31 December to save 50 per cent on your basic tax return fee

***PLEASE IGNORE THIS REMINDER IF YOU HAVE ALREADY SENT US YOUR QUESTIONNAIRE***

If you would like Cogent to prepare and file your 2017/18 tax return and you have not yet sent us your completed personal tax return questionnaire, you will need to do so by 31 December 2018 to benefit from our discounted fee.

The standard charge including VAT for a basic tax return is £240. Questionnaires received by 31 December 2018 will receive a 50 per cent discount on the basic tax return, charged at £120; any returns received after 31 December 2018 will be charged at the full rate of £240.

Please note, more complicated tax returns where additional work or supplements are required, will be subject to additional charges.

  • It is important to remember that even if your limited company has or is to be closed, it does not mean you are no longer required to file a Self-Assessment tax return. Only HMRC can release you from this responsibility and they will only do so providing you have no other sources of untaxed income.
  • If you have a second shareholder, they may also need to file a tax return, even if they haven’t previously; this is due to the changes to dividend tax from April 2016 which affect many dividends over £5,000 (£2,000 in 18/19).

Our Cogent deadlines have been set so that we can complete your return in time to meet the HM Revenue & Customs’ online filing deadline of 31 January 2019. Penalties for late filing of tax returns can be as much as £1,600, even when there is no tax due, so please ensure your tax return is filed on time, whether you ask Cogent to prepare it for you, or you have made other arrangements

You can request a questionnaire by emailing tax@cogentaccountants.co.uk

Please complete the questionnaire and return it together with any attachments to tax@cogentaccountants.co.uk

You are required to file a tax return if:-

  • You have been asked to file one by HMRC
  • You have a tax liability for the year (e.g. tax on dividends or higher rate tax, or if you have any income which has not been taxed at source)
  • You have a new source of income that needs to be declared

***PLEASE IGNORE THIS REMINDER IF YOU HAVE ALREADY SENT US YOUR QUESTIONNAIRE***

Contractors warned there is ‘no escape’ from the HMRC credit card ban this Christmas

Freelancers who paid their last self-assessment tax bill using a credit card are being reminded that there is ‘no escape’ from HM Revenue & Customs’ (HMRC) new ban on credit card payments this Christmas.

The news comes after HMRC moved to ban credit card payments on 13 January 2018 – leaving many forewarned taxpayers rushing to file their returns early in order to avoid falling foul of what critics described as a “customer-unfriendly” change to HMRC’s payment terms.

However, with the credit card ban now in full force, contractors and freelancers will have no choice but to save up the cash needed for their tax return over the Christmas period and pay the amount in full ahead of HMRC’s 31 January 2019 self-assessment deadline.

A spokesperson on behalf of the Institute of Chartered Accountants (ICAEW) pointed out that people who have overlooked this fact and haven’t allowed time to save shouldn’t despair, as “there are other payment options” they can use.

Such options include online/telephone banking, debit card online; direct debit; BACS, CHAPS or cheque posted to HMRC. Taxpayers can also pay at a bank or building society – but not at a post office.

Are you at risk of tax fraud this Christmas?

Taxpayers are being urged to be on their guard this Christmas, after a new study revealed that the number of tax scams reported each month had jumped to 85,000.

The figures, highlighted by accountancy body ACCA, represent a marked increase from the 70,000 reports of tax fraud per month last year.

Chas Roy-Chowdhury, head of taxation at the ACCA, said ‘ordinary’ taxpayers are most at risk of fraud this Christmas – which could include contractors and freelancers.

Fraudsters are getting increasingly more sophisticated, with many targeting their victims via phone, text or email, purporting to be from an official organisation such as HM Revenue & Customs (HMRC).

In fact, phone scams now account for around 10 per cent of all tax scams in the UK.

So, how can unsuspecting taxpayers spot a fraudster and what can they do about it?

Most fraudsters rely on a technique known as ‘spoofing’ or ‘phishing’ to ensnare their victims. This involves tricking the victim into believing that the fraudster is contacting them from a genuine organisation. For example, the scam artist may manipulate their phone number to appear as though it is from the official HMRC call centre.

For all intents and purposes, the fraudster may look like the real deal.

But almost all of these scams have a weakness: under no circumstances are you required to entertain them.

If you feel that you may have a genuine issue or dispute with the tax office, always contact them directly using the email address or phone number provided on the official HMRC website.

A genuine advisor will never have a problem with you asking to phone them back. If they argue this point, it should raise an immediate red flag.

And, as Mr Roy-Chowdhury says: “It is a new world we live in when it comes to tax scams, don’t be a victim and do your own due diligence. Just a few simple checks to avoid being taken for a ride.”

And finally…

At this time of year, UK supermarkets tend to start stocking up with all sorts of special products and delicacies ahead of the festive season. But while Tesco, Waitrose and others are filling aisles with luxury mince pies, egg nog and all the usual Christmas goodies, Sainsbury’s has bucked the trend by launching some slightly more ‘exotic’ treats this Christmas.

According to a report in Sky News, the retail giant has broken new ground this winter by becoming the first UK high street supermarket to stock ‘edible insects’.

As of Sunday 18 November, as many as 250 stores all across the UK have begun selling ‘smoky BBQ crunchy roasted crickets’ and other equally leggy treats at the recommended retail price of £1.50 per packet.

The products, which are manufactured by alternative snack group Eat Grub, have reportedly been on sale on Ocado and other online shopping websites for several months, but this is the first time they have made it into a mainstream store – attracting mixed reviews from bemused customers.

Shami Radia, Co-Founder of Eat Grub, said: “Currently, insects are eaten and enjoyed by two billion people worldwide.

“We’re on a mission to show the West that as well as having very strong sustainability and environmental credentials, they are also seriously tasty and shouldn’t be overlooked as a great snack or recipe ingredient.”

According to recent research, around 10 per cent of Britons have tried edible insects – more than half of whom claim that they enjoyed eating them and would be happy to purchase them again.

Tax / Fraud Scam Phonecall

There is currently a telephone scam where an automated recorded message (claiming to be from HMRC), states that HMRC are trying to contact you regarding either an outstanding tax liability or a possible fraud (the message sometimes even mentions a possible arrest warrant). The recipient is asked to press “1” to speak to the officer dealing with the case.

The call is a scam so please do NOT press 1, or reply to the message.

It has even been reported that in some instances, the call appears to come from a genuine HMRC helpline number 0345 300 3900 and we have heard that this number has possibly been cloned.

If Cogent prepare your tax return, the covering letter that we issue with your tax return will have all the details regarding:

  • How much you need to pay
  • When you need to make the payment by
  • How to make the payment

Send us your Self-Assessment Tax Return Questionnaire by 31 December to save 50 per cent on your basic tax return fee

***PLEASE IGNORE THIS REMINDER IF YOU HAVE ALREADY SENT US YOUR QUESTIONNAIRE***

If you would like Cogent to prepare and file your 2017/18 tax return and you have not yet sent us your completed personal tax return questionnaire, you will need to do so by 31 December 2018 to benefit from our discounted fee.

The standard charge including VAT for a basic tax return is £240. Questionnaires received by 31 December 2018 will receive a 50 per cent discount on the basic tax return, charged at £120; any returns received after 31 December 2018 will be charged at the full rate of £240.

Please note, more complicated tax returns where additional work or supplements are required, will be subject to additional charges.

  • It is important to remember that even if your limited company has or is to be closed, it does not mean you are no longer required to file a Self-Assessment tax return. Only HMRC can release you from this responsibility and they will only do so providing you have no other sources of untaxed income.
  • If you have a second shareholder, they may also need to file a tax return, even if they haven’t previously; this is due to the changes to dividend tax from April 2016 which affect many dividends over £5,000 (£2,000 in 18/19).

Our Cogent deadlines have been set so that we can complete your return in time to meet the HM Revenue & Customs’ online filing deadline of 31 January 2019. Penalties for late filing of tax returns can be as much as £1,600, even when there is no tax due, so please ensure your tax return is filed on time, whether you ask Cogent to prepare it for you, or you have made other arrangements

You can request a questionnaire by emailing tax@cogentaccountants.co.uk

Please complete the questionnaire and return it together with any attachments to tax@cogentaccountants.co.uk

You are required to file a tax return if:-

  • You have been asked to file one by HMRC
  • You have a tax liability for the year (e.g. tax on dividends or higher rate tax, or if you have any income which has not been taxed at source)
  • You have a new source of income that needs to be declared

***PLEASE IGNORE THIS REMINDER IF YOU HAVE ALREADY SENT US YOUR QUESTIONNAIRE***

Private sector IR35 reform to be delayed until 2020

On Monday 29 October, Chancellor Philip Hammond announced as part of his Autumn Budget announcements that the extension of recent IR35 rules to the private sector would be delayed until April 2020.

The news should come as welcome relief to many contractors who previously feared that the extension of the reforms would be rolled out much sooner.

As part of his Budget announcements, the Chancellor explained that implementing such changes too soon would prove problematic for both contractors and businesses. As such, it has now been confirmed that the changes will not only be delayed, but that only “medium-sized and large businesses” will be affected.

Mr Hammond said: “The Government has carefully considered all of the responses received and we are now in a position to propose extending rules similar to the April 2017 public sector off-payroll working reform to the private sector.

“Having listened to concerns, the changes for the private sector will be introduced from April 2020 for medium-sized and large businesses only,” he added.

What do the changes mean?

It is thought that the upcoming changes, which are expected to ‘mirror’ those of the public sector, will shift the responsibility for determining IR35 status.

This will mean that from 6 April 2020 onwards, any contractors engaged with a large or medium-sized client will have their IR35 status determined by that client. However, those engaged to any small businesses will be able to continue operating as per usual, and will remain responsible for determining their own status.

In instances involving medium-sized or larger businesses where IR35 is found to apply, the ‘fee payer’ will be held responsible for deducting any National Insurance Contributions (NICs) and PAYE at source from any income paid to the contractor.

According to reports, a further consultation into the matter is due to be published “in the coming months.”

This consultation is expected to further outline the new rules and how they will operate. So far, it has been confirmed that the definition of “medium and large clients” will be similar to that outlined in the Companies Act 2006. This Act requires at least two of the following conditions to apply before a company is deemed medium or large:

  • It has a net turnover of more than £10.2 million.
  • It has a balance sheet totalling more than £5.1 million.
  • It employees 50 employees or more.

As part of the Budget announcements, a response to previous consultations has also been released, which documents as many as 275 responses from stakeholders of all shapes and sizes.

What should contractors do now?

Private sector contractors need to take note of the new changes and ensure they continue to take responsibility for determining their own IR35 status ahead of April 2020.

Contractors should also continue to carry out regular contractor reviews and ensure they are protected against any enquiries.

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