As the year comes to a close, we look at what changes freelancers need to prepare for the coming New Year.
A statement came from the economic affairs committee in the House of Lords this week accusing HM Revenue & Customs of implementing “disproportionate” powers of demanding near immediate payments from individuals suspected of tax avoidance. What’s more is that these individuals are withheld the right to appeal such enforcement.
This spells bad news for freelancers, as they are the main targets – especially lower and middle-income earners, like NHS nurses, IT, construction and health workers being at risk in particular.
By August 2018, more than £3 billion in tax revenue was issued in the form of accelerated payment notices (APNs) by HMRC.
Graham Webber, the director of tax at WTT Consulting, an agency that represents some of the freelancers under investigation, said, “rather than apply financial penalties on those most to blame, HMRC has moved against individuals in the weakest position.”
Jon Younger writes in Forbes that freelancers must begin preparing for the next recession. Wall Street economists estimate we will be hit by the next recession in 2020, with Brexit adding on another layer of pressure to freelancers. It would be wise for freelancers to start saving now for the coming financial problems.
How will digital tax accounts affect freelancers? If they aren’t delayed, in April 2019, Making Tax Digital (MTD) will become mandatory for VAT returns to be submitted via third-party software to HMRC. Any self-employed traders with a turnover above the threshold will need to keep digital records.
HMRC requires that all digital information be shared with them via their Application Programme Interface (API) platform. So the software you choose to keep your records on must comply with this. With lack of time to prepare, small businesses are significantly impacted as they don’t have the resources in place to undertake MTD.
In 2019, it will be vital that freelancers and small business owners endeavour to keep their websites secure. Make sure you have an SSL (Secure Sockets Layer) Certificate. It stops people intercepting confidential information, keeping it safe and protects the integrity of your brand. Choose a strong hosting service, back up all your data, and don’t skip updates. Your provider is giving you reminders for a reason, so listen to them.
Margot James, Minister for creative industries minister, has announced that £20 million will be pumped into the UK’S creative sector to attract new talent and assist in scaling businesses. This comes after an announcement that the creative industry contributes £100 billion to the economy.
IPSE have begun to look for the UK’s best freelancers, offering prizes of up to £5,000. Have a look for more details here.
The newest estimations state that in the next ten years more than 50% of the working population will be freelancers, with employers preferring to employ freelancer in order to deal with an increase in clients and workload. With that in mind, try to make sure that you continue to be a part of that trend!