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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Tax Changes for Contractors

Contractor Tax Changes

With all the political machinations currently taking place, it’s easy to forget that the new tax year begins today. As of midnight on 6th April a number of new policies took effect, including several that’ll have an impact on contractors and independent professionals. Although the most recent Budget still looms rather large in the proverbial rear-view mirror, these changes relate to the Budget that took place in July last year.

First and foremost, the tax rules surrounding dividends are now changing. The first £5,000 of dividend income earned by shareholders will be completely free of tax, with any amounts over that initial marker being taxed at 7.5% (for any income falling within the basic rate band). Beyond that, higher rate and additional rate earnings will also be subject to higher tax levels of 32.5% and 38.1% respectively. Although this will likely affect the take-home pay of many contractors, it could be by as little as 2% to 4% (see this article on ContractorUK for a more detailed breakdown).

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Budget 2016 Analysis: ‘A Budget That Backs Small Business’

Budget 2016

George Osborne’s latest Budget as Chancellor passed today as expected, with no real surprises. There was good news for the self-employed, but the spectre of a clampdown on the use of Personal Service Companies (PSCs) by public sector employees still looms like a heavy cloud.

As we’ve mentioned on these pages before, Osborne’s tightening of the vice on the so-called ‘Paxman tax’ comes predominantly as a result of public outcry at perceived tax evasion by celebrities and sports stars. However, such measures will also impact those contractors working in the public sector, meaning that from April 2017 they will now face investigation from their clients and agencies to confirm whether they are ‘true contractors’ or simply a ‘disguised employee’. If the client or agency believes that the contractor in question is a disguised employee, it will be required to deduct tax at source from all payments made.

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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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Tax and the Modern Contractor

Contractor Tax

We’re taking another dip into the Kingsbridge archives this week as we continue to highlight some of our previous posts you may have missed. Today, we’re taking another look at tax and what the modern contractor needs to consider.

You’ve established yourself as a contractor; you’ve networked, you’re looked for jobs, and you’ve completed your first contract with a new client. Now it’s time for the best bit – receiving your first cheque.

Don’t get too attached to that number, though. You need to make sure you factor in the tax you owe, now that your tax isn’t being collected on a pay-as-you-earn basis. When you’re starting out as a contractor, it’s really important that you get your head around the realities of your tax situation in order to ensure that you don’t incur the penalties associated with paying the wrong amount of tax.

Read on to find out the kind of things that are worth considering when it comes to tax and the modern contractor.

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Our Budget reaction: What impact will it have on the contractor community?

Summer Budget Reaction

The first Conservative-only Budget in 19 years took place in the House of Commons yesterday and whilst there were some positives, the Tories announced a number of changes which will undoubtedly affect contractors in a negative way, with contractor dividends, expenses, and IR35 among the areas targeted by the Chancellor.

Chris Bryce, CEO of IPSE, noted: “The combination of the action on dividends, clamping down on travel and subsistence and potentially toughening up IR35 legislation could leave many contractors feeling pretty sore.”

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A look ahead – what will the general election mean for freelancers and contractors?

General Election 2015

It pays for freelancers, contractors and the self-employed to pay attention to what is happening politically in the country.  Regardless of the outcome of any election, the independent professional community will be affected by policy making and the winning party’s stance on the self-employed and small businesses in general.

In research published last year, IPSE found that up to 90% of their freelance membership was likely to vote in the upcoming general election. Now, with just over a week to go until the day of reckoning, interest within the freelance community is at its highest.

With election fever well and truly in full swing we wanted to take a brief look at how each of the main parties proposes to support the UK’s freelance community and how independent professionals will fare depending on which party, or which coalition, assumes power on 7th May.

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Five resolutions every contractor should make for the new financial year

New Financial Year 2015

We all made our diet, fitness, productivity and anything-else-you-can-think-of resolutions in January, as the new calendar year rolled in. However, April brings us a new kind of New Year: the new financial year.

As we covered last month, the Chancellor has revealed his final Budget before the general election and the calendar has officially restarted on the fiscal year. So, what better time to look at some practices every contractor can assume for the benefit of their finances. Here are our five financial resolutions that every freelancer should think about implementing this financial year.

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Budget 2015 – Kingsbridge round-up

Budget 2015 Reaction

In his speech, George Osborne today promised that today’s final, pre-election Budget will “back the self-employed, the small business-owner and the homebuyer” proclaiming that Britain’s economy is once more on the rise, dubbing the nation, ‘The Comeback Country’.

Freelancers face a mix of measures following Osborne’s 59 minute speech yesterday, many of which appear to be aimed at making the life of the independent professional much easier, while some still target cracking down further on tax avoidance.

Despite Osborne’s insistence that Britain is in the midst of an economic comeback, much of the rhetoric used throughout the speech focused on further reducing the deficit and national debt, with Osborne even expressing at one point, “we choose… to use whatever additional resources we have to get the deficit and the debt falling.”

With that said, let’s take a look at some of the main measures from 2015’s Budget that are likely to affect freelancers, contractors and independent professionals over the course of the next year.

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Budget 2015 – the Contractor Wish List

Budget 2015

With just two days to go until Chancellor George Osbourne delivers his final Budget before the 2015 General Election, the Association of Independent Professionals and the Self-Employed (IPSE) have released a new report detailing a Budget wish list for contractors and freelancers, outlining some of the changes they would like to see from The Treasury on Wednesday 18th March.

Let’s take a look at what some of their main proposals are and how they stand to benefit the lives of independent professionals across the country.

Simplifying the tax system

At the top of IPSE’s list is a call for the Government to commit to extensive tax simplification measures. This is a perennial issue, especially for one person limited companies, for whom navigating complex tax legislation (notably IR35) is a time consuming and costly issue.

Interestingly, Derek Kelly, Managing Director of ClearSky Contractor Accounting, writes for Contractor UK that he predicts that the UK’s independent professionals would actually appreciate maintenance of the status quo when it comes to tax legislation. Specifically, he believes that effective enforcement of current IR35 legislation would receive a warmer welcome than more rules and excessive complications being put in place.

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