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.
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.
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.
“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.”
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.
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.
Last week we took our first look at two of the reasons why you should renew your contractor insurance policy. This week we’re back with another three. You might not be sure that you want to renew, or you might be unaware of the benefits that come with renewing your policy, or you might not be sure if you should continue insuring with Kingsbridge Contractor Insurance. Let us explain.
When the time comes to renew your policy, we understand that you’ll often have questions. Sometimes our customers aren’t sure why they should renew, and aren’t aware of the many benefits of doing so. Over the next few posts we’ll share some of the key reasons for renewing your contractor insurance policy.
From now on, we’ll be rounding up the latest and most relevant contractor news for the contracting community once or twice a week and summarising it here on the Kingsbridge blog, making it your one-stop shop for all the latest information that’s relevant to you. Without further ado, here’s the first round up:
“HMRC confirmed at the most recent IR35 Forum meeting on 15 December 2015 that no kneejerk measures will be implemented between now and the next Budget.
HMRC was reluctant to provide any timescale with regards to its next decision over the legislation, but it has confirmed that there will be no changes to IR35 included in the Finance Act 2016, meaning no new measures will take place during the 2016/17 tax year.”
“Limited company contractors not caught by IR35 – a tax legislation designed to combat tax avoidance by workers supplying their services to clients via an intermediary – can still claim travel and subsistence tax relief.”
“Many people choose to become a freelancer or start their own business to have more control over their schedule and enjoy a better work-life balance. A new study has now suggested that freelancers get so much gratification from their job that they are happier the busier they are.
Researchers from the University of Leicester and the University of London looked at the work schedule of 45 freelance workers over a six-month period. The study, published in the SAGE journal Human Relations, found that their wellbeing fluctuated in-line with their schedule.”
“The number of self-employed contractors in the UK has reached an all-time high. This is according to the latest figures published by the Office for National Statistics (ONS) which show that the UK’s self-employed headcount rose above 4.6m in the three months leading to October, reflecting a 71k increase year-on-year and a 94k improvement on the previous quarter.” (Contractor Calculator).”
“The Government has revealed further details concerning plans to request quarterly tax returns from contractors over the coming years. In a document titled: ‘Making tax digital’, HMRC highlights that quarterly tax returns are set to be implemented from April 2018, as part of its new digital tax initiative.” (Contractor Calculator).
“On 11 December 2015 we issued a briefing looking at the key points and likely problems with the draft travel and subsistence legislation released on 9 December 2015, and on 14 December 2015 we looked at how umbrella models would be affected. Those were the first two briefings in a series of briefings about the draft legislation.
In this third of four briefings we comment on the impact of the proposals on users and suppliers of personal service company contractors (“PSCs”).”
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.
A note from Steve Wynne, Kingsbridge CEO:
The growth and success of the Kingsbridge group is one of my greatest achievements in life. In turn, I believe that one of the most important parts of running a successful business is giving back to those who need help most. With Kingsbridge having been involved in the water industry in one form or another for more than 25 years, WaterAid is a charity close to my heart.
Kingsbridge began working with WaterAid in 2008, and since then we’ve contributed over £37,000 to their ongoing work in Nepal by donating some of the profits from our business. Our donations have helped to change thousands of lives and have left a lasting legacy in global communities through access to clean, safe water.
Today we’re publicising the presentation of our latest cheque to WaterAid. We’re not doing this to give ourselves a pat on the back, but to draw attention to the brilliant work WaterAid do. Philanthropy has always been a cornerstone of the Kingsbridge business in all its forms, and we plan to continue our strong support as our business continues to grow.
The need for access to clean water in Nepal is greater than ever after the devastating earthquake that hit the region earlier this year. Over 3.3 million people in the country don’t have access to safe water, and over 17 million people (more than half of the entire population) don’t have access to adequate sanitation. 1,927 children die every year from diarrhoea caused by unsafe water and poor sanitation. It’s facts like these that we want to consign to history, and our donations go some way towards equipping WaterAid in the fight to give the people of Nepal the basic quality of life all humans deserve.
We’ll be embarking on further fundraising initiatives in collaboration with WaterAid in the near future, and we’ll be publicising our efforts both on the Kingsbridge blog and in an area of the Kingsbridge Contractor Insurance website dedicated to corporate social responsibility. We’ll also be posting a presentation on the blog from WaterAid shortly about the impact our support has had on their projects across the globe.
You can read more about WaterAid’s work in Nepal here, and you can donate to them here. Every £1 you donate to WaterAid’s Deliver Life appeal between 10th November 2015 and 10th February 2016 will be doubled (up to £5 million) by the UK government.
The challenge is to make sure those in need have access to the things we take for granted – clean water, toilets, and hygiene. I believe that challenge begins with a simple gesture: a donation to those who can help.