Originally written by Timothy Adler on Small Business
Self-employed Uber drivers, those who make a living renting out rooms on Airbnb, and other gig economy workers could find themselves having to pay VAT.
The Treasury is eyeing slapping VAT on self-employed gig workers and others in the sharing economy, as it tries to claw back cash to pay for the Covid pandemic.
What this means is that Uber fares or Airbnb stays could cost 20 per cent more.
>See also: Treasury to discuss COVID-19 grant for company directors
The Treasury has issued a call for evidence as concern grows that as much as £20bn could be lost as tax revenue as activity shifts online. According to PwC, the total value of the UK sharing economy will be £140bn by 2025 compared with £7bn in 2016.
For example, plumber call-out firm Pimlico Plumbers charges 20 per cent VAT to customers, but a plumber found on Taskrabbit does not because most sole traders fall below the VAT threshold of £85,000 of turnover. Similarly, accounting firms charge VAT to clients on billable hours but a freelance accountant found on Upwork may not.
Although the government has pledged not to raise the rate of VAT under the “triple tax lock”, there
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Treasury eyes hitting self-employed gig workers with VAT charge
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Self-employed Uber drivers, those who make a living renting out rooms on Airbnb, and other gig economy workers could find themselves having to pay VAT.
The Treasury is eyeing slapping VAT on self-employed gig workers and others in the sharing economy, as it tries to claw back cash to pay for the Covid pandemic.
What this means is that Uber fares or Airbnb stays could cost 20 per cent more.
>See also: Treasury to discuss COVID-19 grant for company directors
The Treasury has issued a call for evidence as concern grows that as much as £20bn could be lost as tax revenue as activity shifts online. According to PwC, the total value of the UK sharing economy will be £140bn by 2025 compared with £7bn in 2016.
For example, plumber call-out firm Pimlico Plumbers charges 20 per cent VAT to customers, but a plumber found on Taskrabbit does not because most sole traders fall below the VAT threshold of £85,000 of turnover. Similarly, accounting firms charge VAT to clients on billable hours but a freelance accountant found on Upwork may not.
Although the government has pledged not to raise the rate of VAT under the “triple tax lock”, there
Hot Business News Today
Rishi Sunak ignores small business and self-employed in Spending Review
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Rishi Sunak has mostly ignored small business hit by the pandemic and the struggling self-employed in today’s Spending Review.
The chancellor shrugged off calls for him to cut national insurance and help those self-employed such as company directors who have found themselves excluded from government Covid support.
He did however freeze any increase in business rates when they kick back in again in April. The Treasury estimates that this move will save businesses £575m over the next five years.
Indeed, there was more help for the employee than the employer, as Mr Sunak increased the National Living Wage to £8.91 per hour for those aged over 23 and announced a Restart Scheme to help the newly unemployed.
Jonathan Geldart, director general of the Institute of Directors, welcomes the Restart Scheme but said the chancellor missed a trick by not combining the scheme with a cut to employers’ NI contributions.
>See also: Rishi Sunak urged to help self-employed company directors
Nigel Morris, employment tax director at MHA MacIntyre Hudson, said that Sunak failed to deliver for businesses.
Morris said: “More help for businesses is essential to protect our economy, yet we saw no major support made available for them, for example
Hot Business News Today
Rishi Sunak ignores small business and self-employed in Spending Review
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Rishi Sunak has mostly ignored small business hit by the pandemic and the struggling self-employed in today’s Spending Review.
The chancellor shrugged off calls for him to cut national insurance and help those self-employed such as company directors who have found themselves excluded from government Covid support.
He did however freeze any increase in business rates when they kick back in again in April. The Treasury estimates that this move will save businesses £575m over the next five years.
Indeed, there was more help for the employee than the employer, as Mr Sunak increased the National Living Wage to £8.91 per hour for those aged over 23 and announced a Restart Scheme to help the newly unemployed.
Jonathan Geldart, director general of the Institute of Directors, welcomes the Restart Scheme but said the chancellor missed a trick by not combining the scheme with a cut to employers’ NI contributions.
>See also: Rishi Sunak urged to help self-employed company directors
Nigel Morris, employment tax director at MHA MacIntyre Hudson, said that Sunak failed to deliver for businesses.
Morris said: “More help for businesses is essential to protect our economy, yet we saw no major support made available for them, for example
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Non-essential retail and gyms to reopen next month under new tier rules
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Non-essential shops and gyms in England will be allowed to reopen in the run-up to Christmas under the new tier system.
However, pubs and restaurants in tier three can operate on a takeaway-only basis while pubs in tier two can reopen if they serve ‘substantial meals’.
Boris Johnson is to make an announcement on new COVID-19 tier rules later today. These will come into effect when lockdown lifts on December 3 and most regions are expected to be put under level two and three restrictions.
There is a hint of good news for hospitality. The 10pm curfew is expected to change to 11pm. Last orders will be called at 10pm, giving customers an hour to leave the premises.
Shops can reopen in all tiers, along with gyms and places of worship. Recreational sports will also be making a comeback.
Cinemas can open in tiers one and two while the ‘work from home where you can’ advice will remain across England.
It’ll be a three-tier system as before. Restrictions of each tier are laid out in the table below:
How the new lockdown rules will affect your small business
Tier 1Tier 2Tier 3
Non-essential retail to reopenNon-essential retail to reopenNon-essential retail to reopen
All
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How Brexit is going to affect your business – #1 imports
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
You will have to declare all post Brexit imports
As EU businesses, UK retailers did not previously have to declare goods arriving from suppliers also within the EU. Post Brexit, all businesses will have to declare all imports arriving from within the EU. This is already the case for importing from non-EU countries such as the USA, China and other non-EU countries such as Switzerland, Lichtenstein, Norway and Iceland.
You can make the declarations yourself, but most businesses use a courier, freight forwarder or customs agent.
If you want to declare customs yourself, discover what to do here.
On the other hand, if you want to use a customs agent or freight forwarder you can find a list here.
New rules for certain types of goods
There will be different rules for importing goods in categories including food, seeds, alcohol and tobacco. You may need to update the licenses and certifications for any products you import that fall under these categories.
Find out more about licences and certifications here
Find out more about rules for food, seeds and manufactured goods here
Find out more about rules for alcohol, tobacco and certain oils here
You will need an EORI number
If you already import from
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Sunak extends furlough to whole of UK until March 2021
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
UPDATED: Rishi Sunak has extended the 80 per cent furlough scheme until the end of March 2021, capped at £2,500 per worker.
The extended furlough scheme will operate across the UK, not just England as originally announced, and employers need only cover National Insurance and pension contributions.
To be eligible for the scheme, employees do not need to have been placed on furlough previously but must have been on an employer’s RTI payroll submission on or before October 30 2020.
An employer may rehire an employee to place them on furlough if they were made redundant after September 23.
Further guidance is due to be released on November 10.
However, it is unlikely that many businesses, having gone through the process and cost of the redundancy, will have a change of heart and rehire employeees – leaving the chancellor open to criticism that he should have been bolder and extended the furlough earlier.
The Bank of England said it expects 5.5 million people to be on the furlough scheme this month, which the Resolution Foundation said would cost £6.2bn. The cost in future months will be lower if the economy reopens. At the height of the pandemic in April
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Sunak extends furlough to whole of UK until March 2021
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Rishi Sunak has announced details of COVID-19 financial support for businesses in all parts of the UK.
He has confirmed that workers will get access to the furlough scheme up to 80 per cent (capped at £2,500 a month) until the end of March 2021 across the UK. Employers need only cover NICs and pension contributions.
The upfront funding for devolved nations also goes from £14bn to £16bn.
This move comes just a few hours after the Bank of England said it was pumping an extra £150bn into the economy.
Sunak added that he will redeploy job incentive schemes at a more suitable time.
However, the chancellor has faced criticism for reintroducing the furlough scheme when Scotland, Wales, Northern Ireland and parts of northern England had harsher restrictions and didn’t receive such generous funding.
The Welsh government was unhappy when its pleas for more funding during their ‘firebreak’ lockdown last month. It had to rely on its own coffers to fund a £300m grant scheme.
Experts argue that such short-term measures aren’t helping businesses to plan for the future. Richard Churchill, a business advisory partner at Blick Rothenberg, said:
“Currently business decisions are inextricably linked to the various coronavirus measures in
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Self-employed Income Support Scheme (SEISS) to be extended at 40%
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
The government is getting ready to extend the Self-Employed Income Support Scheme (SEISS) to support freelancers and the self-employed through to April 2021.
Two further grants will be offered:
The first covers November 2020 to January 2021 at 40 per cent of trading profits, capped at a total of £3,750
The second covers January 2021 to April 2021, the level is yet to be announced
SEISS is being reintroduced as England prepares to go back into lockdown from November 5th until December 2nd, though this could be extended.
How does this compare to the previous SEISS grants?
The third round isn’t as generous as the first and second. The second grant round covered 70 per cent of trading profits, capped at £6,950. The first grant covered 80 per cent of trading profits, capped at £7,500.
Am I eligible for the next Self-employed Income Support Scheme grants?
You must have been eligible for the first and second rounds of SEISS to apply. You must also declare that you were trading (but are unable to do so due to coronavirus) and plan to continue trading.
The online application service for the next grant will open on December 14th 2020 and HMRC will be providing
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Nearly half a million self-employed face having universal credit cut
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Nearly half a million self-employed people claiming universal credit face having their payments cut next month.
The government is on course to reinstate rules aligning self-employed universal credit payments with those of full-time workers on the minimum wage.
This is despite the government promising to suspend the cap – or “minimum income floor” (MIF) – for self-employed universal credit claimants “for the duration” of the Covid pandemic.
>See also: 1m self-employed face having to pay tax bill larger than what they earnt
Government officials told the Times that the MIF is set to be reinstated on November 13. However, no decision has been taken yet.
The Institute of Fiscal Studies has estimated that the MIF affects about 450,000 households who would lose an average of £3,200 a year by treating them the same as full-time employees on the minimum wage.
Stephen Timms, Labour chairman of the Commons welfare committee, told the newspaper: “The suspension of the minimum income floor should be extended, as the government said it would be, for the duration of the pandemic. Its re-imposition just when the effects of coronavirus are getting worse will be a heavy blow to many self-employed people, currently struggling to keep