Tag Archive | "Brexit"

IR35 Changes Causing Concern

Another day, another IR35 bombshell that will shock nobody bar HMRC (probably). A new survey conducted by Robert Half has found that more than three in five senior decision makers are either very concerned or somewhat concerned that IR35 changes, due in April next year, will make it hard for them to attract temporary workers. 

So, let’s reiterate. The majority of decision marketing in big and medium sized companies believe that IR35 is going to negatively impact their business. However, we choose to say it, it hardly makes for great reading, does it? 

The survey questioned 398 medium to large sized UK businesses about the impact that they thought IR35 may have for them. The concern they have isn’t limited to attracting new contractors either. Nearly half are also concerned about the possibility of losing contractors that they already have working for them. 

HMRC believes that up to 90% of independent contractor companies are not complying with IR35 off-payroll working rules. The new legislation will mean that many contractors will need to renegotiate their existing contracts if they fall within IR35 statutes, to ensure that they are not financially compromised by the new tax pressures that HMRC are looking to exert on them. However, only 15% of employers say that they are willing to pay better rates to keep their existing contractors, or secure new ones. 

This is at a time in the world economy where the need for contractors, and the desires of people to work for themselves is ever increasing and leaves the whole thing …well, for want of a better way of saying it…in a right bloody mess.

As more and more business and independent bodies are calling on the government to pause and review IR35 legislation, last month, Contactor UK rallied the troops by writing to all MPS asking them to oppose the imminent IR35 changes and to vote against it being included in any finance bill. They also asked them to propose HMRC looks for a fairer system for contactors and to suspend any activity around the Loan Charge. 

So that leaves things just about as clear as they have always been… meaning it’s still an absolute minefield, nobody has a clue what’s going to happen when the laws finally pass and if there’s a chance it may actually get a last-gasp reverse in Parliament. 

Remind you of anything???

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60% of Contractors “Unmoved” By Brexit

If you thought Brexit would turn the world upside down for British contactors, then think again…most are very much “unmoved.”

This is according to a brand new commissioned report by a company called Kensington Mortgages, and in that report they discovered around 60% of freelance contractors in the UK are not bothered about our country leaving the European Union.

63% of those surveyed said Brexit would not affect their contracting and it would be business as usual once Britain will stand alone, once again.

France and Germany will no longer be brothers to our freelance contractors, but if we believe the report…then UK contractors just don’t care.

“Who needs them,” is very much the mood on the street among the average IT contractors and freelance business owners around the country.

From London to Newcastle and from Cornwall to Dover…our contractors are pitching their own tents and getting ready for the oncoming storm.

Even if a hurricane approaches the White Cliffs over the next few years…our contractors are staying in their tents.

Yes, they really are “unmoved” when it comes to Brexit.

However, the report also found out that contractors were generally not optimistic about securing a self employed mortgage right now or in the future when Brexit happens.

42% said they specifically believed getting a home loan for contractors would probably be out of their grasp in the near future, although if you ask me this isn’t to do with Brexit.

The self employed have always struggled to get mortgages and other kinds of loans, and although things are improving, it might be a while until being approved for a “contractor mortgage” is as easy as pie, so to speak.

Right now though, as we speak, the one thing every contractor in the UK can count on is a contractor accountant.

Brexit might bring tough times and being approved for a mortgage might be just out of your reach…but a contractor accountant will always be there in your corner fighting for your rights.

“I paid less tax last year,” is what some some freelance contractors say after hiring a British contractor accounting firm.

“I don’t care about Brexit, and I don’t care about getting a mortgage…as long as I pay less tax, legally of course,” is what smart contractors are saying while getting their lunch time kebabs.

It’s in those very kebab shops where they rub shoulders with the contractor accountants. They queue up side by side…contractors and contractor accountants. Together as one. In it together. They stand together.

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Contractors have “Unfair Tax Advantage” says Report

In a report that is sure to make contractors laugh, the IFS, Institute for Fiscal Studies, have said that self employed people have an unfair tax advantage.

Do we really need another silly report where someone who doesn’t know what they are talking about, are paid to sit around and write about what they know nothing about? I’ve seen some pretty ridiculous reports and studies about contractors and the self employed, but this one really does take the prize for being one that went right into my bin.

To summarise the report in one sentence (you don’t want to read it, trust me), what they are saying is that the tax system treats self employed people differently to those who are employed, which ultimately means they end up paying less tax, even though employees are 85% of the workforce compared to 15% self employed.

Sounds to me like someone just doesn’t know what they are talking about, and are now looking for any excuse to take a shot at self employed people, contractors, freelancers, gig workers…you name it, apparently we all have some unfair advantage.

Do you know what? I am not even going to get into the numerous reasons why this report is wrong on so many levels, but what I will say is this…the UK needs self employed people now more than ever before mainly because the labour market is changing and we have a potentially tough time ahead with Brexit on the horizon.

If you get a few small benefits from being a contractor then it should be applauded, not criticized, although if you ask me there are very few of the self employed who pay less tax than their employed counterparts, and if they do it’s because they get themselves a good contractor accountant who can save them a few quid.

Not only that, but when you are self employed then you are in a completely different situation than employed people. No holiday pay for one. Do I need to go on? If anything, I think that contractors should be paying a lot less tax than employees, but we won’t be seeing that anytime soon.

One interesting piece of information is that the self employed are going to have to pay about £285 out of their own pockets when the government bring in the new digital tax system which will have to be done 4 times a year, not to mention the extra cost of hiring accountants and time away from their business.

Employed people won’t have to do that. Didn’t think of that did you IFS? There was a lot of things that didn’t occur to you it seems.

So you can ignore this new report from IFS, and just get on with being self employed. Even if you do pay a bit less tax, it isn’t unfair and you don’t have any advantage.

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Philip Hammond Suggests Britain Could Become “Tax Haven”

Here is something we all thought would never be said by a member of the government, the Chancellor Philip Hammond said Britain could become a tax haven.

Just imagine all those multi-millionaires and billionaires leaving Monte Carlo and arriving in Dover on their super yachts.

So why the sudden low tax comments from Philip Hammond you might be wondering? Well, it all comes at a time when Britain is trying to negotiate an exit from Europe, and as you might expect, many of our European neighbours are not too pleased about our departure, which means they are going to make it difficult for us.

In response, our Chancellor has suggested that we could lower income tax in the UK, which means many of the richest people in Europe would be tempted to make a move here.

It’s an interesting strategy for sure, but one I think wouldn’t actually be brought into reality. No doubt the millions of contractors and self employed people in the UK would be really pleased at the news of less tax to pay, and all of the contractor accountants would have more business than ever before with the European super rich entering our shores…but it just isn’t going to happen.

We are currently at a time where everybody is doing a lot of talking, but when it comes down to it Brexit will happen and there won’t be anything significant that changes. That is to assume that the UK will leave the European Union of course, and even if they do, what kind of exit it will be.

Let’s not get into the small details on this blog though, all we really care about is how this all affects contractors and the self employed.

As I’ve talked about before, I don’t believe that UK contractors have anything to be concerned about at all, and in actual fact they should find more work than ever before.

This is because there will be more demand for their services and all major companies are planning to stay in the UK, particularly cities such as London.

Don’t worry, that company who you currently get a lot of work from isn’t going to suddenly get up and move to Paris. The message is clear…companies are staying in Britain.

Right now we are waiting on a speech from the Prime Minister Theresa May, as she talks about the plan for Britain to be out of the European Union at some point this year. Many experts agree that the process should start around the end of March, although who knows for sure.

My advice to contractors is simple, just get on with what you do best…offering your skills and finding new clients. If Philip Hammond wants to make Britain a tax haven even better.

What about you contractor accountants out there…are you soon to be doing the accounts of the European super rich? I don’t think so, although you never know.

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