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Spring Budget 2017: Reaction Round-Up

Spring Budget Round-Up

It already seems like a lifetime since the Chancellor presented his controversial Spring Budget last Wednesday. It’s fair to say that Mr. Hammond probably feels a good few years older this week than last, but breaking a set-in-stone manifesto promise and incurring the combined wrath of the national press and Britain’s many million strong army of self-employed will do that to you. Of course, his announcement that Class 4 NIC payments for the self-employed will rise by 2% up to 11% by 2019 has since been reversed in one of the more embarrassing political u-turns of recent times, but doubts still remain.

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Christmas as a contractor

Christmas as  Contractor

 

Unless you’ve specifically planned to take Christmas off, the festive period can leave some contractors feeling at a bit of a loose end. While to many it’s a happy time to spend with family and friends, to some it can be a time of financial worry where work just isn’t forthcoming because everyone else is off.

We’ve got some tips to help you get through the festive period with your sanity in tact!

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Brexit: The Contractor’s View

In or out? Remain or leave? The question is a simple one, but rarely has there been such fevered debate around any topic as there has been about the upcoming EU referendum. With just over a week to go until the votes are cast, it would seem that no one is entirely certain as to which way the vote will swing. A damning indictment of two poorly orchestrated campaigns both beset by dubious propaganda and petty infighting, or simply a true reflection of public hand-wringing over the most important political and economic decision in a generation?

It’s not for us to say which way we’d like the vote to go, but it’s imperative that we give our clients a voice. Contractors, freelancers, and the self-employed make a huge contribution to the UK economy but it seems little consideration has been given to how a Brexit would impact their way of working. As David Cameron recently noted, “the self-employed are a key part of our long-term economic plan for the country” and we believe their views should not be ignored.

We recently sent out a survey to our customer base asking a few key questions. Will they be heading to the polls? How will they be voting? Are they worried about the impact a Brexit would have on their jobs and businesses, or are they looking forward to a new dawn?

 

Kingsbridge Referendum Infographic

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Budget 2016: What Contractors Would Like To See

Budget 2016

It’s almost that time of year again. If you’re a regular reader of the Kingsbridge blog you’ll know that we’ve been following the potential impact of political changes on the contractor community for a while now. Whilst the outlook had seemed quite bleak going into the winter of 2015, following on from a relatively unfavourable summer Budget, the wider picture has become a little rosier since then. An uneventful Autumn Statement was followed up by a Draft Finance Bill surprisingly void of any mention of IR35, which in turn was followed up by Julie Deane’s thorough and balanced Self-Employment Review, arguing for more support for contractors and the self-employed.

So what should contractors expect when the next Budget is delivered on 16th March? There are strong rumours that the Chancellor is planning another increase in Insurance Premium Tax (IPT), up to 12.5%. Given that IPT was raised from 6% to 9.5% in November 2015, if the speculation was true it’d mean that the tax would be doubled in less than six months – a remarkable increase by any standard. Should it go ahead, an increase in IPT could raise as much as £1.3bn for the Treasury in the first year alone.

Such rumour gives credence to the feeling among many that the insurance industry is being singled out, as Treasury minister Harriet Baldwin MP more or less admitted recently in a letter to the AA, stating: “IPT is not a tax on consumers but on insurance companies.” BIBA (The British Insurance Brokers’ Association) also noted that a rise in IPT would discourage customers from taking out policies.

Speculation abounds that the Chancellor will also seek to end the abuse of PSC’s in a crackdown on what many see as an income tax loophole. Pushed firmly into the spotlight by the media in recent months due to the likes of Fiona Bruce and Jeremy Paxman setting themselves up as “one-man companies”, the Chancellor believes that the rules that were designed to help contractors and freelance workers are now widely abused and “completely unfair”.

With an £18bn “black hole” to plug as a result of the significant economic downturn in recent months, Osborne seems set to renew his efforts to tackle tax avoidance. Traditionally PSC’s were used by professional contractors doing short-term work for a number of clients. By paying corporation tax at 20% and taking a modest wage, plus dividends from the company, they save on both income tax and NI.

But abuse of the tax rules is estimated to help around 20,000 public sector workers who should pay equivalent taxes to other workers avoid on average over £3,500 a year in income tax and National Insurance contributions.

In future, the public sector body employing the worker will be responsible for deciding whether income should be taxed in the normal way as employment income, rather than leaving it up to the individual worker. New guidance will also be published to make it clearer when employment taxes should be paid.

A government source, quoted in the Telegraph, said:

“Personal service companies can be legitimate, but we estimate that 90 per cent of people who should comply with the rules, don’t.

“Some may not understand the rules but it’s clear others are using them as a way to minimise their tax bills. You have situations where someone working in a public body pays thousands of pounds less in tax than someone doing exactly the same job alongside them who’s taxed as an employee.

“That can’t be fair – either on the taxpayer or their fellow workers. We are going to put a stop to it.”

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Four Reasons To Become A Contractor

Reasons To Become A Contractor

More and more people working in what one might term ‘traditional’ employment are moving into the freelance and contracting sectors. As Julie Deane’s recent Self-Employment Review made clear, the number of people currently self-employed in the UK has reached unprecedented levels, not only making a crucial economic impact but also ensuring that the sustained growth of recent years continues on an upward trajectory. It’s true, in many ways, that there’s never been a better time to make the switch and plough your own furrow – leave the office, leave your routines, perhaps even leave your comfort zone. Contractors are well and truly making their own mark on the economic landscape. Read on below to see just a few of the reasons why you should consider following the self-employment path.

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Self-Employment Review: Contractors Need More Support

Self-Employment Review

After what could’ve been a challenging year for the contracting community passed without being, well, quite so challenging (evidence here and here), more positive news was received today in the 41-page shape of Julie Deane’s government commissioned independent report on self-employment. You can read Deane’s report in full here (and we encourage you to do so), but the takeaway was one many contractors, and the self-employed in general, would wholeheartedly agree with: more support is required.

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Contractor News Round-Up: 12th February 2016

Contractor News Round-Up

Below you’ll find our latest round-up of contractor relevant news stories that have surfaced over the past few weeks. We’re starting to see a lot of chatter around HMRC’s new IR35-specific ESI tool, rumoured to be coming into play in the spring. Read on for news on that, as well the other subjects that have caught the eye at Kingsbridge over the last week or two.

HMRC confirms ‘IR35-specific ESI tool’

“Speaking at the December IR35 Forum, HM Revenue & Customs said its aim was to have a beta version of an “IR35 specific ESI tool” by “spring 2016”.

HMRC’s Mark Frampton also told the forum that the hope is for the tool to provide “clearances” on status, much as the Contract Review Service is meant to now, to a “mass” of contractors.”

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The Self-Assessment Deadline – Tips For Contractors

Self-Assessment Deadline

The beginning of the year can be a stressful time for everyone, with new resolutions to keep to, the return to work after Christmas excess, and the cold days of winter. For contractors, there’s also the added burden of the self-assessment deadline looming large at the end of January (the 31st to be exact). We can’t ever promise to make doing your tax returns any more fun (although we find a glass or two of wine tends to help), but we can give you some tips to help the process go more smoothly for this year and the years beyond. We know your time is at a premium so we’ll get on with our guide without any further fuss:

Make sure you submit your tax return on time

It might sound like a given, but you’d be surprised at the number of horror stories we’ve heard about contractors leaving things too late and not making the deadline (which, to remind you again, is 11:59pm on 31st January). If your tax return arrives after this point you’ll pick up a £100 fine. So check those internet connections, make sure you know where all your paperwork is, and give yourself more time than you think you’ll need.

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Kingsbridge and Genie Accountancy Announce Partnership

Genie Accountancy

Kingsbridge Contractor Insurance are pleased to announce a new partnership with Genie Accountancy, one of the most well respected specialist contractor accountants in the UK.

Kingsbridge have many years of experience in the contracting industry, and we’ve used our expertise to put together a comprehensive, compliant, and competitive insurance solution specifically tailored to meet the needs of contractors, freelancers, and independent professionals. Our policy package offers all the key insurances limited company contractors require in one easy to manage product, including professional indemnity, public liability and employers’ liability, meaning only one policy is needed to cover a contractor’s main exposures.

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Draft Finance Bill 2016 – The Kingsbridge Summary

Draft Finance Bill 2016

Today saw the release of the Draft Finance Bill 2016. After an Autumn Statement surprisingly devoid of any mention of changes to IR35 rules, despite significant pre-Statement speculation to the contrary, most members of the contracting community expected to see changes announced in today’s draft Bill. However, IR35 was once again conspicuous by its absence.

Any proposals for change that may have been happening behind government walls are staying there for the time being.  The Draft Finance Bill did include the changes to tax relief on Travel and Subsistence expenses where a contract is inside IR35 that were announced in the Autumn Statement. However, the lack of any IR35 reform suggests the government took heed of the advice of the stakeholders they consulted, as well as the overwhelmingly negative reaction to the proposed changes from the contracting community as a whole.

In a letter received by Nick Holmes, CEO of Umbrella.co.uk, and timed to coincide with the release of the Draft Finance Bill, the Chancellor stated: “We will be considering this issue carefully before taking any further decisions. Should any further changes be introduced they would be subject to detailed consultation before publishing any draft legislation.”

Whether this means that the Government are simply biding their time, or whether they have abandoned their plans for IR35 reform altogether, remains to be seen. It seems now that all eyes have moved to the next Budget statement on 16th March 2016.

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