Monthly Archives: April 2017

Higher VAT costs for smaller traders

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April 2017 will see many small companies with low annual costs faced with a higher VAT liability if they currently use the Flat Rate scheme (FRS). What will the change mean for contractors? First, there is a change to the way ‘labour intensive’ companies will calculate their VAT liabilities for each quarter. The standard VAT scheme requires companies to calculate… Read more »

Freelance group calls for statutory definition of self-employment

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IPSE, the freelancer group, says the government should create a statutory definition of self-employment. This would end confusion over who is and is not self-employed. Currently, the law defines an employee and a worker, but has no definition for the self-employed. IPSE made its call when it was asked to give evidence to Matthew Taylor’s investigation into modern employment practices…. Read more »

HMRC ESS tool has no legal authority

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Determining a contractor’s IR35 status is important, but recently HMRC’s Employment Status Service (ESS) has been called into question. One authority says that the tool is not legally binding and even using it does not mean that reasonable care has been taken in determining status. The statement came from The Law Place’s Martyn Valentine. His firm specialises in employment status… Read more »

NIC hike withdrawn

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In an embarrassing climb-down, Chancellor, Phillip Hammond, was forced to withdraw a plan announced in the Budget on 8 March to increase Class 4 National Insurance contributions. The move was widely criticised and, to the relief of the self-employed, the Chancellor was forced to announce withdrawal of the plan in the face of continuing complaints that the increase would break… Read more »

Tax delay not enough

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Following the Budget 2017 one-man companies with turnovers below the VAT limit should have more than an extra year before being forced to go digital. Many tax bodies have made a joint statement saying that, while the delay was welcome, Making Tax Digital (MTD) should be optional for companies with turnovers below the £83,000 limit. The tax bodies agreed with… Read more »

Rethink on Flat Rate VAT urged

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HMRC has a plan to crack down on abuse of the VAT simplification scheme, but it has been warned that the changes may not be effective and would have an adverse effect on many small companies. No one is disputing that tackling abuse of the Flat Rate VAT scheme needs to be done, but the CIOT has argued that HMRC… Read more »

Small Business Commissioner

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Lack of faith in the services of the Small Business Commissioner (SBC) has led to delays in an appointment to the post. The government recently published new rules on what the commissioner would do when he or she was appointed. However, only 2% of small suppliers were impressed by the government’s announcement. Micro-business owners are generally not aware of either… Read more »

Apprenticeship levy

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While apprenticeship levies might be a problem for umbrella companies, contractors who work for Personal Service Companies should also think about them. The imminent reforms of IR35 mean that end-clients and agencies are considering how they will payroll PSC contractors. When an agency is considering working with a PSC in the public sector, the agency must consider how all employment… Read more »