Articles - 5th February 2020

One million missed self-assesment deadlines with HMRC

Words by Emily & Jack

Nearly one million miss tax return deadline (BBC News)

A total of 11.1 million did hit the deadline of the end of Friday to complete their self-assessment tax forms. Mostly those with more than one source of income and the self-employed are required to complete returns. Anyone with a genuine excuse can talk to the tax authority to avoid fines.

Paper returns had an earlier deadline of 31 October, but a record 10.4 million people filled in the forms electronically for which the deadline is 31 January. Last year, just over one million people missed the 31 January cut-off. Fines can be issued immediately for late filing.

More than 700,000 people submitted their tax returns on deadline day, peaking between in the hour from 16:00 GMT, when 56,969 filed. Some 26,562 people completed their returns in the final hour before the deadline.

Previous and failed excuses for missing the deadline in recent years had included someone claiming they were unable to log on because they were up a mountain in Wales.

The current system means HMRC could demand a penalty of £100 for late filing during the first three months after the deadline.

After three months, additional penalties of £10 per day can be demanded, up to a maximum of £900, followed by further charges six and 12 months after the deadline.

 

Rise in self-employed boosts numbers filing UK tax returns (Financial Times)

The number of people required to fill out a tax return in the UK has hit a record high, which analysts have attributed to an increase in self-employment.

Figures released by HM Revenue & Customs, the tax authority, on Monday revealed 11.7m people were required to submit a self-assessment return and pay any tax due by January 31 — up from some 11.5m last year, the previous highest total.

Of those expected to file a return, 10.8m — 92 percent — did so on time. The 958,296 individuals who missed the deadline face an immediate £100 fine, with the potential for further penalties.

Overall, HMRC received a record 11.1m returns by the deadline — made up of both expected and unsolicited returns and late self-assessment registrations. Many left it to the last minute, however. More than 700,000 submitted their tax returns on deadline day, with 26,562 completing their returns between 11 pm and 11:59 pm on January 31. Meanwhile, 10.4m submitted their return online, rather than via post — more than ever before.

 

Self-employed parents stop claiming child benefit (The Times)

Fairness for Families, a campaign by The Times and The Sunday Times, is calling for changes to the way that child benefit is allotted.

A high-income charge introduced in 2013 means that once a parent’s income hits the £50,000 threshold they have to repay 1 percent of the amount they received in benefit for every £100 of income over £50,000. By the time a salary reaches £60,000 the benefit is completely wiped out.

Child benefit puts the self-employed at a disadvantage, because their income is less predictable.

The rate of self-employment among women has increased twice as fast as men since 2008, according to the Office for National Statistics, partly fuelled by a growth in part-time work. Young women aged 22-30 working for themselves are more than four times as likely as men to be part-time workers.

Many stay-at-home parents who are no longer claiming child benefit because of the income limit are losing out on state pension credits.

Only by registering for child benefit, even if you do not claim the money, can a parent get the national insurance credits that mean you will not miss out on years of contributions that could cost you in retirement. Since the tax charge was introduced in 2013, 600,000 families have dropped out of the system.

As well as calling for the government to increase the £50,000 threshold, and apply the cap to household income rather than an individual’s salary, our campaign wants the government to ensure that no one will lose out on state pension because of the benefit cap.

 

Creative Freelancers’ Brexit Fears Seem To Ease, As The Transition Period Begins (Freelance UK)

Asked by FreelanceUK how heavily Brexit will be rated as a strain in its next confidence index, IPSE replied positively, saying, “we’re past the worst of the Brexit uncertainty.”

Although aware that only last week it said the steps for EU citizens to freelance in the UK were opaque, the freelance group thinks Brexit will be dwarfed, as a concern, by tax reform.

According to the Times, the Tier 2 visa without any salary threshold will come into force as soon as the UK’s Brexit transition period ends in December, with new criteria like an individual’s qualifications, spoken English ability and willingness to work in certain regions.

  

Half of contractors would ask for a pay rise and benefits if found to fall within IR35, survey finds (People Management UK)

Half of freelance and contract workers would seek a pay increase and other benefits if their hirer categorised them as falling inside IR35 legislation, a poll has shown.

A survey of contractors by Brookson Legal found 50 percent of those polled would ask for more money if recategorised as falling under IR35 when the changes to off-payroll rules are rolled out to the private sector this April. 

Just over a fifth (21 percent) of the 516 UK contractors polled said they would challenge an ‘inside IR35’ decision.

Changes coming into force in the private sector in April shift the responsibility of assessing which contractors fall into this category on to employers. The changes have applied to public sector employers since 2017.

According to draft legislation, employers using recruiters to source contractors will receive some protection from tax liabilities if assessments are carried out incorrectly, but could still be left with bills to foot if the recruiter is unable to pay up.

 

Gig workers caught in ‘app trap’ without skills development, says think tank (People Management)

App-based work fragments gig workers’ careers into “unpredictable micro-chunks” and stops them focusing on the future, a report has said, calling on businesses such as Uber and Deliveroo to do more to help workers develop their careers.

The report, Better work in the gig economy, published by think tank Doteveryone, described gig economy jobs as “like quicksand”, where workers sometimes became trapped in insecure, piecemeal work and lacked the financial stability or time to develop the skills that will help them progress in their careers.

It called for app-based businesses to redesign their platforms and provide more stability to gig workers – which include roles such as graphic designers, beauticians, and translators, as well as food delivery and ride-hailing apps – by guaranteeing a minimum wage and providing human points of contact for workers and physical ‘help hotspots’ where workers can go to receive support and advice.

A statutory ‘minimum gig wage’, including an allowance to cover the statutory benefits such as sick pay enjoyed by employees, would also mean gig workers’ take-home pay after costs would be on parity with employed workers, the report said.

It also recommended that the government’s national retraining scheme – created to address the expected effects of automation on the economy – be adapted to support skills development.

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