Originally written by Timothy Adler on Small Business
HMRC has opened its Self-Employed Income Scheme for applications here.
Around 3.5m self-employed freelancers and contractors will already have been contacted by HMRC, deeming that they are eligible for the Self-Employed Income Support Scheme (SEISS).
Freelancers and the self-employed can apply for a one-off payment of up to £7,500 covering three months. This is based at looking at your tax returns for the past three years and then averaging your monthly income. Only freelancers and the self-employed who have been earning up to £50,000 a year can apply for the self-employed coronavirus income support scheme.
>See also: Self-employed Income Support Scheme what it means for you
The grant does not need to be repaid but will be subject to income tax and national insurance.
Money should hit bank accounts by May 25 or six working days after a claim is made.
However, the Treasury is already thinking about dropping the ceiling for self-employed support to £30,000 when the scheme is extended.
And the Self-Employed Income Support Scheme does not cover owner-directors of small businesses. Treasury believes it would be too difficult to calculate an average of three years’ worth of self-employed income from the tax returns of owner-directors, which include
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Learn How to Make Money Designing Simple Graphics
by Editor • • 0 Comments
Graphic designers can make a pretty tidy living these days. But you don’t need to have formal training or be able to create complex designs to make money as a graphic designer. You can make decent money designing simple graphics for clients who don’t have the time or the eye for it. Depending on how […]
The post Learn How to Make Money Designing Simple Graphics appeared first on The Work at Home Woman | Legit Work From Home Jobs.
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HMRC opens self-employed income support early on May 13
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
HMRC will open the Self-Employed Income Support Scheme (SEISS) earlier than expected on May 13.
The taxman has already begun notifying the self-employed if they are eligible for the SEISS.
Previously chancellor Rishi Sunak had announced the scheme would open in June.
The claim service will open on May 13 and payments to eligible workers will be made by May 25, or within six working days of completing an application.
Approved claims through the self-employed income support will be made within six working days.
The Self-Employed Income Support Scheme will allow you to claim a taxable grant of 80 per cent of your average monthly trading profits, paid out in a single instalment covering three months, and capped at £7,500 altogether.
>See also: Self-employed Income Support Scheme what it means for you
HMRC says this temporary scheme may be extended.
The grant will be subject to Income Tax and self-employed National Insurance.
You can check if you’re eligible to claim through the HMRC website here.
Self-Employed Income Support
While the accelerated scheme will be welcomed by the 3.8m self-employed workers thought to be eligible, the government’s decision to press ahead with the Self-Employed Income Support Scheme disappoint up to 2m people who it has
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Taxman will not fine you for getting things wrong with IR35 within first year
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
The government has confirmed those affected by IR35 tax changes, potentially bringing hundreds of thousands of freelancers within PAYE, will not be fined if they get things wrong in its first year.
Unless, that is, the taxman finds evidence of deliberate non-compliance with the controversial new IR35 rules.
This soft-landing period will only last until April 2021.
The Treasury has published the findings of its review into IR35 off-payroll working rules, due to come into force next month.
As expected, there will be no delay to the implementation to IR35, but the key changes are:
Customers (both employers and freelance contractors) will not have to pay penalties for inaccuracies relating to the off-payroll working rules in the first 12 months unless there is evidence of deliberate non-compliance
HMRC will amend the legislation to exclude wholly overseas organisations with no UK presence
The government will have a legal right to force clients to respond to a request for information about their size from an agency or worker
Brian Palmer, AAT tax policy adviser said: “This means that if employers or [freelance] contractors have taken reasonable steps to comply but get something wrong, HMRC will not be pursuing them with fines and penalties.”
>See
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Rishi Sunak blinks, says HMRC will ‘go soft’ on IR35 changes in year one
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Chancellor Rishi Sunak says the taxman will not be “heavy handed” when IR35 changes come into effect on 6 April, potentially bringing 230,000 sole traders within PAYE.
Answering questions in Birmingham on Saturday night, the new chancellor sought to reassure both companies and freelance contractors, saying the controversial policy will have a soft landing – at least in year one.
HMRC is keen to bring freelance contractors within PAYE in order to tackle what it calls “disguised employment”. Currently freelance contractors, one-man-band limited companies who work on projects for companies, pay corporation tax at 20 per cent instead of higher PAYE rates, while employers duck national insurance contributions. The Treasury sees both freelancers and employers as gaming the system, as effectively many freelancers are full-time employees. The IR35 reforms are projected to bring in £3bn over the next four years.
>See also: One third of freelancers say IR35 changes affecting mental health, contemplating suicide
However, the IR35 changes have triggered howls of protest, with freelancers complaining that rushed implementation has seen unprepared and panicked employers drop them. Nearly one third of freelancers say they are having mental health issues, and even contemplating suicide, because of the uncertainty.
And
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One third of freelancers say IR35 changes affecting their mental health
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Freelancers say that IR35 changes to the way they are treated for tax are affecting their mental health and even prompting suicidal thoughts.
Over one third of contractors say that HMRC’s crackdown on how they are taxed, treating them as full-time employees rather than freelancers – known as IR35 – is either damaging their mental health or sending them to their GP for anxiety or suicidal thoughts.
Fifteen per cent of freelancers caught out by the IR35 rule changes are set to default on mortgages or are in the process of selling their homes, according to one survey.
>See also: More than four in 10 businesses could phase out contractors due to IR35
One anonymous freelancer said: “Frequently having chest pains and not sleeping. Added pressure of wife not coping well due to fear of losing family home. Trying to remain calm, but frequently having suicidal thoughts.”
Currently, contractors assess their own tax status, but impending reforms coming into force from April 6 will shift this responsibility to hiring businesses.
HM Revenue & Customs wants stop “disguised employment” gaming the system; working in a permanent position within a company without paying the same tax or employee contributions as full-time
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Become Your Own Boss and Start a Freelance Career in 2020
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Labour pledges to scrap IR35 rollout to business … and then backtracks
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Bill Esterson, the shadow small business minister, spoke out of turn this week when he pledged Labour would stop the rollout of IR35 tax changes to business.
Speaking on Monday night, Esterson pledged at a small business hustings in the City of London that Labour would scrap IR35 being extended to the private sector, despite there being nothing about it in Labour’s manifesto.
“We absolutely can’t see it rolled out into the private sector the way things are at the moment,” Esterson told the hustings.
“It should never have been implemented in one go.”
Asked later to confirm if it was Labour Party policy to review IR35 and not rollout changes out to the private sector in April 2020, he tweeted: “absolutely”.
>See also: Labour small business minister: ‘Boris just says whatever pops into his head’
However, that tweet was subsequently deleted:
Esterson told Small Business that Labour policy was now to review IR35 changes before they come into effect.
IR35 will draw sole traders and freelance contractors into the tractor beam of IR35, which HMRC sees at tax avoidance when freelance contractors are effectively permanent.
Liberal Democrat deputy leader Sir Ed Davey was the big winner at the City hustings, organised
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How to wind up your personal service company ahead of IR35 legislation
by John Bell • • 0 Comments
Originally written by John Bell on Small Business
While the nation has been gripped by Brexit over the past three years, another hot topic for those in the contracting sector is the impact of the new off-payroll legislation, otherwise known as IR35. In particular, its ramifications when it’s rolled out to the private sector in April 2020.
We know that when the reforms hit the public sector in 2017 many public-service hirers put all contractors inside IR35 to avoid any comeback. Come April 2020 the same could happen.
Faced with being deemed an employee and unable to continue working through their own personal service company (PSC), many contractors will consider their options. Some could choose to work through a different model, such as an umbrella, but many contractors may decide to shutter their limited personal service company and pursue alternative paths.
So, how do you wind up your personal services company ahead of IR35 coming into effect next April?
‘Start the MVL conversation with your accountant now’
Voluntary strike off
A contractor closing a business can apply for voluntary company strike off at Companies House but a Members’ Voluntary Liquidation (MVL) may be more appropriate. A strike-off request could be turned down if a business has creditor
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How UK businesses should cope with incoming IR35 rules
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
With the IR35 rules being reformed within the private sector from April 2020 (essentially mirroring the changes introduced to the public sector back in April 2017), there is a great deal of uncertainty, not only about how the rules will work, but also how employment businesses will practically operate the new legislation.
IR35 puts the onus for deciding whether a freelance contractor is truly freelance or a full-time employee on the recruitment agency. HMRC is on the lookout for what it considers “disguised employment”.
The controversy is that contractors who are considered to fall within IR35 are taxed as an employee, often at the higher rate of income tax, but do not get benefits like paid annual leave or sick pay.
Additionally, employment businesses will be responsible for deducting income tax and employee’s national insurance contributions (NICs) from fees paid, regardless of whether their client pays its bill.
With less than 12 months to go until these changes come into force, it is important that employment businesses who engage contractors through personal service companies (PSCs) understand what practical steps they can take now to prepare in advance.
How to prepare in advance:
Contact current PSCs
Employment businesses should liaise with