IR35 IRL – How much will getting caught cost you?

IR35

There was a time when IR35 was something of a bogeyman to contractors. Tall tales and horror stories. Lurking in the shadows. A looming spectre, but never quite tangible enough to make you feel its presence. Those days are over. Gone are the 1 in 60,000 odds of being caught.

In the last 18 months or so HMRC has ramped up its campaign to catch contractors working as disguised employees and therefore inside IR35. Need more proof? We’ve rounded up a few of the more prominent cases below.

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Everything a Contractor Needs to Know About IR35

IR35

IR35. Two letters. Two numbers. It might not seem like much, but it should be at the forefront of any contractor’s thoughts. Not understanding the implications of IR35 could be the difference between a trouble-free working existence and a huge, potentially business-ending, fine.

If you work in the public sector there’s a good chance you’ve already felt the sting of the recent reforms which have left independent workers at the likes of the NHS and BBC up in arms at their treatment.

Unfortunately, there’s a very good chance that the same reforms will roll out to the private sector in the near future, after an upcoming consultation due to be released this year. Given how prevalent the legislation is likely to become, it’s important that contractors make sure they know as much as possible.

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Increasing number of students gravitating towards self-employment, survey finds

Student Self Employment

We like to keep our ear to the ground here at Kingsbridge. We’ve been vocal in the past about the positive impact of contractors, freelancers, and the self-employed on the UK economy. But what does the future hold? The working world is changing rapidly, and the next generation of workers will find themselves in an entirely different situation to their parents.

The path these days isn’t as clear cut as it once was. Gone is a lifetime spent in one job, gradually working your way up the ladder. Workers today move and adapt, changing jobs, industries, and skill sets whenever they need or want to.

We’ve noticed that fluidity in our role as insurers, and a recent survey by print company Solopress indicated a similar trajectory going forward. Graduate jobs, the survey found, are being ditched in favour of self-employment.

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Government announces consultation around private sector IR35 reform

Private Sector IR35

With a certain sense of inevitability, on 18th May the government announced their intention to carry out a consultation on tax avoidance in the private sector.

Any of those in the contracting community with even a passing interest in IR35 legislation will have known this was coming, the question having always been ‘when?’ rather than ‘if’. But what impact is it likely to have going forward?

When announcing the consultation period, the government were at pains to point out that “no decisions have been made” in terms of rolling out IR35 reform into the private sector and made it clear that they were actively seeking opinion on how the rules around the controversial legislation can be improved.

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Universal Credit system does not support the self-employed, report confirms

Universal Credit

A committee of MPs have poured scorn upon Universal Credit rules which they say risk “crushing” the self-employed and start-ups. In a report published on 10th May, the MPs state that the benefit has been “designed with little regard…for people starting and running their own business” with the ultimate consequence not stopping far short of “crushing potentially viable, productive enterprises.”

Despite freelancers, contractors, and the self-employed making up around a sixth of the entire UK workforce, the revelations come as little surprise given the cavalier attitude the government has displayed towards them in the past. With IR35 reform rumbling on, and a rolling out of private sector reform appearing inevitable, the Universal Credit blow is simply the latest example of the callous disregard shown towards an area of the workforce that has continued to grow despite the obstacles placed in its path.

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Spring Statement 2018 – The Kingsbridge Reaction

Spring Statement 2018

Yesterday marked the Chancellor’s first Spring Statement. Given that we’d previously been told to expect no major policy changes or any drastic fiscal manoeuvring, the lack of any great detail wasn’t a surprise.

The contracting community were, however, expecting to see some kind of announcement on the future of potential IR35 reforms in the private sector. Although there was no mention of such reform in Mr. Hammond’s speech to the Commons, further information released afterwards confirmed that a consultation will be published later this year:

“In the coming months the Government will publish: Off-payroll working – a consultation on how to tackle non-compliance in the private sector, drawing on the experience of the public sector reform. The Government will work with businesses and individuals to mitigate the potential administrative burdens of any future changes.”

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2017 Autumn Budget: Reaction Round-Up

Budget Round-Up 2017

A couple of weeks on from the 2017 Autumn Budget, the dust has settled. It’s fair to say that the reaction, from a contracting perspective at least, was mixed. On the one hand, the government took a big step closer towards extending its much-maligned clampdown on IR35 into the private sector. On the other, there was a clear effort at a more conciliatory approach towards the flexible working market than many expected.  The immediate tax hikes and Draconian reform of previous years were replaced by a stream of consultations and discussion documents. An unsteady half step forward, then, rather than one giant leap back.

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Beat the Insurance Premium Tax Increase!

IPT Increase

Regular readers of the Kingsbridge blog will already be aware that Insurance Premium Tax is rising to 12% from 1st June 2017.  You can read our take on the increase here.

So what does it mean for you? If you’ve been putting off a necessary insurance purchase we’d recommend that you take advantage of the window between now and the end of May.

It’s worth noting that the saving only applies if your policy starts before 1st June. If you were to buy before that date but chose to have the cover start after then you would fall into the 12% bracket.

Getting your cover in place might not be the most exciting of prospects, but it makes sense to save as much money as you can.

If you’re a contractor or freelancer why not get in touch with Kingsbridge? We offer the simplest, most compliant, and most comprehensive self-employed insurance cover in the market. The best possible cover at an unbeatable price. What’s not to like? You can reach one of our friendly Customer Service Team on 01242 808740, or you can head on over to our website and get a quote by clicking the button below.

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Spring Budget 2017 – The Kingsbridge View

Spring Budget 2017

“Since a politician never believes what he says, he is quite surprised to be taken at his word,” Charles de Gaulle once noted. Although the principle isn’t quite the same in this case, it would seem that Phillip Hammond might be quite surprised at the disappointed reaction to his announcement that Class 4 NIC payments for the self-employed will rise by 2% up to 11% by 2019.

Why the consternation? Hammond’s announcement is a direct volte-face of a previous Tory manifesto commitment made by his predecessor as Chancellor, George Osborne. In fact, as Chuka Umunna noted on Twitter during the Budget announcement, the 2015 Conservative manifesto promised four times not to raise National Insurance.

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2017 Spring Budget – What Should Contractors Expect?

Spring Budget 2017

2017 stands as something of an anomaly on the important political announcement front – the one and only time that there will be two Budgets in a single year. As noted by the Chancellor last November, the Autumn Statement has now ceased to be. Tomorrow’s spring Budget will be the last of its kind (for the foreseeable future at least), replaced by a yearly autumn Budget (commencing in autumn of this year), followed from 2018 onwards by a Spring Statement.

Confusing? Yes. A good idea? Definitely. By holding the Budget in the autumn it will allow for major tax changes to occur annually, well before the start of the fiscal year. The Spring Statement will then exist to respond to OBR forecasts, but will not be a major fiscal event in itself.

So what should contractors expect tomorrow? As always, it’s impossible to truly predict what will happen (take last year’s Autumn Statement as an unwelcome example) but there are a few key pointers to look out for. We don’t expect to see anything dramatic given that there will only be a 6 month gap between Budgets (not to mention the fact that the Government’s self-imposed 31st March deadline to begin the formal Brexit process is arriving at a startling pace) but there’s always room for a surprise or two. What do we already know, and what would we like to see? Read on below for our observations.

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