A checklist for the January 31st tax deadline
It’s boring, but if you’ve saved money specifically for this purpose, it shouldn’t be painful. Here’s what you must do to get through your self-ass...
In The Times this week there was a report of panic over the Treasury’s plan to tackle “disguised employment”, where the government estimates that one in three people claiming self-employed status should be treated as full-time employees and pay more tax. Under IR35, anyone who contracts under one main employer must pay tax as if they were an employee.
IPSE believes that business will not be ready for the changes introduced in April, and that businesses may turn their backs on freelancers rather than having to reassess if IR35 applied. They went on to call IR35 a “short-sighted tax grab that will cause untold economic damage”. This follows on after the government cancelled planned tax-relief for the self-employed as well as growing anger over universal credit.
This item was discussed further in Crystal Umbrella, where it was cited that the Treasury estimated that a third of contracting professionals are “de facto” employees, and should pay extra tax. Without reforms to the IR35, HMRC would be depriving itself of significant income. However, this may be at the cost of the “freelance premium”, that offers services to companies at a lower rate than full-time employees.
In Accountancy Age, Emanuela Hawker made it clear that increased taxes on the self-employed are going to be a necessary part of the budget released by the government. The idea of IR35 only making things worse since it was introduced in 2000 was repeated, with a special mention of Brexit causing the government to abandon the favourable flexible economy for tax reasons. Hawker makes clear that the government has not responded to the problems of employment status and the gig economy effectively enough, and that the already complex tax laws are becoming more complex to the detriment of the self-employed.
PoliticsHome and IPSE cowrote a piece summarising the “Path to Prosperity” report that alleged that although 72% of freelancers enjoy the salary they have currently, 77% worry that it will not last. This is worsened by the lack of money management advice and flexible savings products for the self-employed. The report recommends putting protections in place to regularise earnings, improve earning potential, and increasing flexibility in order to counter these concerns.
The report is available here.
Real Business gives a strong summary of the gig economy, along with why it doesn’t deserve the press it gets.
Consultancy.uk covered the continuing growth of the gig economy and the issues it causes for cybersecurity, facilitated by lean-thinking businesses as well as freedom-hungry workers. The issues include remote working on public WIFI, vulnerability to phishing attacks, and lack of security implementation on the device level. They end the article pointing out that a reliable freelancer should make an effort to keep their client’s data safe.
Small Business examines whether the gig economy will replace the job for life, pointing out the benefits of freelancing, such as minimal tax payments, flexible hours, and freedom of choice. They balanced this by the problems with freelancing, such as not being entitled to sick pay, lack of pensions, no holiday entitlement, and no regular pay. A counter to these problems is too broaden your skillset, seek advice, and get to grips with new legislation.
Design Week beautifully covers several stories of designers dealing with mental health to raise awareness for mental health day.
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