Those who listen to financial and investment news or follow Martin Lewis the MoneySavingExpert will be aware that there is currently an extension to the opportunity to boost your state pension by buying additional National Insurance (NI) years.

A limited time opportunity to buy missing years from 2006 to 2016 has been extended from the original 5 April 2023 deadline to 31 July 2023, because Department for Work and Pensions (DWP) phone lines had been unable to cope with demand.

In order to receive a full UK state pension, most people currently need to have 35 qualifying years of NI contributions. If you have fewer than 10 qualifying years, you will probably not be entitled to any UK state pension at all and there could be other state benefits that you are not qualified for.

Why would you be short of qualifying years?

• If you have worked overseas or offshore for much of your working life and have not been on a UK payroll or elected to pay voluntary UK NI.
• If you have been studying for many years and any earnings have been below the NI threshold.
• If you have been self-employed, you may have paid insufficient NI.
• If you have been a stay-at-home carer – although a parent claiming child benefit will be credited with free qualifying years up the child reaching age 12.

Can I check my state pension forecast?

If you are considering retirement but not yet at pension age, you can apply online for a state pension forecast using your Government Gateway login.

https://www.gov.uk/check-state-pension

Can I check my NI record?

You can do an online contribution record check which again requires your Government Gateway login.

https://www.gov.uk/check-national-insurance-record

This service will also activate your Personal Tax Account if you have not already done so.  The Personal Tax Account is a useful way of keeping on top of your self-assessment status.

What does this mean for me?

When considering salary levels, Cogent Accountants are very conscious of the salary required to achieve a qualifying national insurance year so hopefully most clients will have achieved qualifying years while working through their companies with us.

Whether to top up for missing years is basically an investment decision and not something that we can advise you on. There is an assortment of guidance available online, the information on the MoneySavingExpert website seems to be especially comprehensive or you may wish to speak to an IFA if you have one or would like us to refer you to one.

If you are tax resident in the UK

If you are UK tax resident and you sell residential property in the UK on which there will be Capital Gains Tax (CGT) to pay, then you must report this sale to HM Revenue and Customs (HMRC) within 60 days of the completion of the sale and must also pay the CGT within 60 days of completion. This report is made by filing a special online return through a Capital Gains Tax on UK property account.

A residential property is a flat, house, or other property which is for living in.

You do not need to report the sale through this 60 day reporting regime if there is no tax to pay – for instance:

• if the property was always your principal private residence (main home) and you hadn’t made an election for another property to be treated as principal private residence.
• or if you have made a loss on the sale of the property.
• or if you have no earlier CGT disposals in the tax year and the gain on the property will be covered by the annual CGT exemption (reduced to £6,000 from 6 April).

If you normally file a self-assessment tax return, then the sale will also still have to be included in that tax return.

If you are tax non-resident in the UK

If you are claiming non-residence for UK tax purposes, for instance because you are working full-time overseas for an extended period or because you have returned to your home country or have retired overseas, then you also have to file a 60 day CGT return and if you sell a UK residential property.

The requirement for non-residents is more stringent in that the return must be filed regardless of whether any UK CGT is payable.

Disposal by gift

A disposal by gift is also subject to CGT and these reporting requirements but with the added disadvantage that there may be no money to pay the tax.

Common misconceptions

The solicitor dealing with the property sale will deal with this – Not True

Not only is the 60 day CGT return not part of the service provided by the conveyancing solicitor, it is likely that they won’t even mention the requirement for such a return.

If I move into my rental property for a few months before the sale, that will make it a CGT free principal private residence – Not True

Where a property has been used as your home for part of the period of ownership and as a rental for part of the period of ownership, the capital gain is time apportioned between the two periods and taxed accordingly.

If I am living overseas, I don’t need to worry about UK taxes – Not True

Even if you have left the UK with no intention of ever coming back, then you are still likely to be subject to UK tax on UK based income and capital gains.

What does this mean for me?

If you are planning the sale of a UK residential property which has been a rental or second home, tell your accountant / tax adviser in advance that a sale is planned so that they can tell you how to set up the special Capital Gains Tax on UK property account, what information you need to collect together to calculate the gain and prepare a draft CGT calculation for you if you wish.

We are delighted with the response we had to our latest refer-a-friend giveaway.

Lots of you took the time to share our services with your friends and colleagues, but only one person could ultimately win…

Jamie Sutherland from Fetcham, Leatherhead in Surrey

Jamie spent last week sunning himself on the golf courses and beaches of Playa De Las Americas, Tenerife but couldn’t wait to get home and enjoy his favourite shows on the 50’’ 4K Smart TV.

Luckily, we caught him just before he jetted off to the Canaries. He was first out of the hat in our prize draw and had the telly by 6pm that evening… and is delighted with it!!

He told us that he was looking at new TV’s at Costco just before he went away but luckily decided to hold off until he returned from holiday… a very wise decision Jamie!

Jamie is a keen golfer playing most weekends and when he isn’t on a golf course, he ends up sleeping in front of the TV. He watches a lot of Sky Sports and Netflix… whilst he is awake!

He has been a client of ours for over 20 years.

Not only did he win the TV but Jamie will soon be receiving £100 for the introduction of his Wood colleague last month, Martyn Phillips, who subsequently signed up and will also get £100, simply for joining Cogent!

Thanks to everyone for sending over your referrals to us.

You too can be a winner by referring your friends, colleagues and contacts to us… watch out for our next Cogent promotion coming soon!!

Meanwhile, for each successful referral we receive, you will get £100 – and the person being referred gets £100 too!

Remember, you don’t have to be a contractor to use our services. We act for all types of businesses from small traders to large companies. It doesn’t matter whether the person you refer operates as self-employed, is in a partnership or is a director of a limited company, we are ready to help them.

If you have any questions about the services we offer or our referral scheme, please feel free to contact us.

As we look ahead into 2023, there is no question that the UK economy has work to do to shake off the issues that overshadowed much of 2022. However, we believe the year ahead looks positive for our contractor clients.

The ‘experts’ tell us that the UK economy is heading into a downturn, which historically has seen an increase in the use of temporary workers. We see from our clients that new projects are pushing ahead in 2023 which is good news all round.

Although it has been widely reported that unemployment rates are presently at record lows, many firms are reluctant to increase headcount by employing permanent employees.

The flexible workforce is a vital lifeline for the UK economy, in times of boom or bust, so there is no doubt it will once more be needed to fill gaps and provide knowledge in many sectors.

Many companies across the supply chain are taking a more pragmatic approach to IR35 as they realise how important contractors are to their business.

Although it will be two years in April since the private sector reforms were introduced, we are seeing a constantly increasing number of clients finding outside of IR35 contracts and working through their own limited company.

Please contact us if you need any help or advice on working through your limited company.

If you’re looking for a flexible and rewarding career path, contracting might be the right choice for you.

Contracting allows professionals to work on a project-by-project basis, offering greater control over their work-life balance, career trajectory, and earning potential.

There is a wide range of reasons why contracting may suit your life plans, but here are some advantages for you to consider:

Greater Flexibility

One of the primary benefits of contracting is the flexibility it offers. As a contractor, you can choose when and where you work.

You can decide which projects to take on, and you have more control over your schedule, including enjoying extended breaks between contracts.

Additionally, many contractors have the freedom to work from home, which can save time and money on commuting.

Control Your Career Trajectory

Becoming a contractor gives you the ability to take on a variety of projects, which can help you gain new skills, gain new contacts and expand your experience in your field.

You also have the ability to choose the type of work you want to do, allowing you to focus on projects that align with your professional interests and goals – as well as earning ambitions.

This can help you build a more diverse and well-rounded portfolio of work, which can be beneficial when seeking future opportunities – whether in or outside of contracting.

Greater Earning Potential

Contractors typically charge higher rates than employees, which means they have the potential to earn more money.

Contractors working outside of IR35 have a high degree of responsibility for their own taxes, insurance, and other expenses that are typically covered by an employer.

Additionally, as a contractor, you can negotiate your rates more easily, which means you can earn more money for your work.

The flexibility offered by being a contractor can help you achieve higher earnings quickly.

Enhanced Work-Life Balance

Contracting allows professionals to have greater control over their work-life balance. As a contractor, you can choose the projects you take on and the hours you work, which means you can create a schedule that works for you.

Additionally, you have the ability to take time off between projects, which can be particularly beneficial for those who want to take extended breaks for personal or family reasons.

Contracting offers a range of benefits that can be particularly attractive for professionals seeking greater flexibility, control, and earning potential.

While contracting may not be the right choice for everyone, it can be an excellent option for those who are willing to take on the responsibilities and challenges of working independently.

If you’re interested in exploring contracting as a career path, it’s important to do your research and speak with other professionals who have experience in the field.

Please contact us for help and advice on going into contracting and setting up a limited company.

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

We are fast approaching the deadline for filing your Self-Assessment tax return, which is Tuesday 31 January 2023.

If you would like Cogent / CMEASY to prepare your tax return, please complete and return the Self-Assessment Tax Return Questionnaire for the tax year 2021/22 as soon as possible.

As we are close to the deadline, we cannot guarantee to complete the tax return to meet the deadline, so it is important that you complete the questionnaire as soon as possible.

Please also be aware that if we have already prepared your tax return, this will not be filed until our fee has been paid and the tax return approved.

Outstanding Balancing Payments for 2021/22 and the First Payment on Account for 2022/23 are also due and payable by 31 January 2023 and interest will be charged on late payment.

If you worked via Cogent for the period 06/04/21- 05/04/22, you can request a questionnaire for 2021/22 by emailing tax@cogentaccountants.co.uk

If you worked via CMEASY for the period 06/04/21 – 05/04/22, you can download a questionnaire for 2021/22 by logging into your secure portal at www.cmeasyauth.co.uk using your username and password and clicking ‘Documents’ and ‘Personal Taxes’.

If you cannot remember your password, please use the ‘Forgot Password’ button on the login page. If you experience any further difficulty logging into your secure portal, please email tax@cmeasy.co.uk

The standard charge, including VAT, for a basic tax return, is £240 as we have passed the deadline to receive this service at a discounted rate. Please note, more complicated tax returns, where additional work or supplements are required, will be subject to additional charges.

If you have a second shareholder, they may also need to file a tax return, even if they haven’t previously. For further advice, please contact our Tax Department.

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 / CMEASY to prepare it for you, or you have made other arrangements.

Due to postal delays arising from industrial action, please return your completed questionnaire together with any attachments by email only to our Tax Department – tax@cogentaccountants.co.uk if you are a Cogent client for the period or tax@cmeasy.co.uk if you were a CMEASY client for the period.

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. additional and higher rate tax, student loan in repayments, high-income child benefit charge 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***

How much are you and your services worth? Is it more or less than in previous years?

Almost across the board, businesses are increasing their fees for services and the price of goods, as they continue to grapple with the cost-of-living crisis.

As we enter a new year, now is a great time to review your costs and think about how much you should charge for the expertise that you offer.

How you can demonstrate value and improve your income

There are several ways that you can determine the value of the personal services that you supply and use this to improve the amount that you are paid.

Scarcity – How few are people in your position? Is there a demand for your expertise? The reality is that the fees charged for certain services increase exponentially based on their scarcity.

At the moment, many employers are facing a recruitment nightmare, particularly in highly skilled industries.

This has been reflected by rapidly rising wages for some employees and fees for consultants and contractors.

If you are in such a high-demand industry or role, then your fees should reflect the scarcity of skills and services.

If you haven’t reviewed what you charge in the last year, whether you are in a contract or looking for new work, then now is the time to consider requesting a higher fee.

Ask yourself, could they find a replacement for the same fee? If the answer is no, then you are undercharging, and it may be time to address new and existing relationships with businesses.

Experience – Every year we get a little bit older and gain more experience. To those looking to engage your services, there is a big difference between a person with five years of experience and 10 years of experience.

If you are more experienced, you have faced a wider range of scenarios and by remaining employed shows that your expertise has been valued for longer.

While qualifications are important to many businesses, experience is just as key. It is important you play upon this aspect and the value that it gives to your services.

In many cases, it is likely to be an important way of justifying your worth to potential engagers.

Differentiators – No two people are the same, whether that is in their approach to work, availability, skills or qualifications, so focus on the things that make you stand out.

Sit down and think about what previous clients have said about you and use these as your main selling points.

If you know that you have a different work ethic or perhaps have knowledge that is in short supply and valuable to a particular client, sell this to them. Make them aware that they can’t afford to not work with you.

Be selective – If, having reviewed the points above, you think you have quite a good case for higher pay, it is worth seeking out contracts with a higher value that are, ideally, outside of the IR35 rules.

While we all have concerns about where the next contract may come from, if you have researched and identified the value that is inherent in your skills, experience and scarcity, you should be free to choose the type of work you commit yourself to.

Competition – Be clear with potential engagers of your services about the competition that they face from other businesses for your expertise. Make them understand the challenges that they may face in obtaining someone with the same knowledge and experience.

Highlight the scarcity of people in your position and make them understand why you are worth more than others.

Don’t sell yourself short. While there might be a temptation to help out struggling contacts or support businesses in need, ultimately you have a definable worth and shouldn’t be swayed otherwise.

Do your research, calculate the value of what you provide and deliver a competitive proposal, keeping in mind your own realistic goals for how much you want to earn and your flexibility for work.

If a business tells you they can get your services and expertise for less elsewhere, let them. In the current skills-driven economy, you can find work that meets your true worth.

Rishi Sunak’s government has, for the foreseeable future, shelved plans to regulate the umbrella industry.  The government had previously announced plans to establish a single enforcement body (SEB), however we understand this will no longer be the case.

The single enforcement body would have unified the three bodies which currently police compliance across areas of employment, providing regulatory reform for umbrella companies and their employees.

The SEB was a manifesto pledge made by the former Prime Minister, Boris Johnson, in the run-up to the last general election.

Speaking to MPs on 13th December, Grant Shapps – the Secretary of State for Business, Energy and Industrial Strategy – confirmed that the employment bill as a whole is no longer “on the cards” for the current government.

There are currently three bodies which enforce compliance with employment laws and regulations: HMRC National Minimum Wage Enforcement, the Employment Agency Standards Inspectorate and the Gangmasters and Labour Abuse Authority.

However, these bodies do not regulate the umbrella sector, leaving umbrella workers unprotected from tax avoidance schemes and rogue operators.

Failure to conduct due diligence when appointing an umbrella company could see contractors unknowingly operating via a tax avoidance scheme.

Contractors should note that just because an umbrella company is being promoted by your agent or regulated by an umbrella body, it doesn’t mean they aren’t a rogue outfit.

We have had a number of contractors approach us with the most horrendous issues so it is important to remember it is your head on the ‘’chopping block’’ and you must always satisfy yourself that the umbrella being promoted is right for you.

HMRC recovers unpaid taxes from scheme participants rather than scheme operators, and thousands of contractors have been hit with retrospective tax bills as a result.

Such schemes disguise pay in non-taxable forms, such as loans, in order to avoid paying the taxes owed. HMRC’s approach to recovering these taxes has been the introduction of the Loan Charge, which handed contractors tax bills totalling in the region of £3.2 billion.

Finally, remember you don’t have to work through an umbrella.  A Personal Service Company (PSC) is a perfectly legitimate, legally compliant and often commercially sensible option for many contractors, and anyone working through an umbrella may want to look for an ‘outside IR35’ contract in order to work through their own PSC. Please contact us for help or advice.

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

If you would like Cogent / CMEASY to prepare and file your 2021/22 tax return and you have not yet sent us your completed Self-Assessment Tax Return Questionnaire, you will need to do so by 31 December 2022 to benefit from our discounted fee.

If you have a second shareholder, they may also need to file a tax return, even if they haven’t previously. For further advice, please contact our Tax Department.

The standard charge including VAT for a basic tax return is £240. Questionnaires received by 31 December 2022 will receive a 50 per cent discount on the basic tax return, charged at £120.

Any questionnaires received after 31 December 2022 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.

Our deadlines have been set so that we can complete your return in time to meet the HM Revenue & Customs’ (HMRC) online filing deadline of 31 January 2023.

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 us to prepare it for you, or you have made other arrangements.

If you worked via Cogent for period 06/04/21 – 05/04/22, you can request a questionnaire for 2021/22 by emailing tax@cogentaccountants.co.uk  

If you worked via CMEASY for period 06/04/21 – 05/04/22, you can download a questionnaire for 2021/22 by logging into your secure portal at www.cmeasyauth.co.uk using your username and password and clicking ‘Documents’ and ‘Personal Taxes’. If you cannot remember your password, please use the ‘Forgot Password’ button on the login page. If you experience any further difficulty logging into your secure portal, please email tax@cmeasy.co.uk 

Due to postal delays arising from industrial action, please return your completed questionnaire together with any attachments by email only to our Tax Department – tax@cogentaccountants.co.uk – if you are a Cogent client for the period or tax@cmeasy.co.uk if you were a CMEASY client for the period.

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. additional and higher rate tax, student loan in repayments, high income child benefit charge 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***