SJD February News Roundup
February is over and it’s time for SJD’s news roundup. As always, there’s a lot going on in the world of contracting. Here are some of the highlights.
BBC presenter faced with £400k IR35 bill
Christa Ackroyd, a former BBC presenter has been ordered to pay an outstanding bill of over £400k in taxes. In the recent ruling, HMRC determined that she was an employee of the BBC and not a contractor.
The determining factors in this ruling included her contract length, which was agreed for seven years. Her employer also exercised a significant amount of control over her day to day workings and the court argued that she was obligated to undertake any work which was passed to her.
Know your IR35 status
In light of this news, it’s important for contractors to know their IR35 status. Since the rules changed in April 2017, status is no longer at the discretion of the contractor, but rather the client. If you’re currently working in the public sector, it may be helpful to undergo a contract review to avoid any fines.
SME bosses intend to work past retirement age
According to research by Aldermore, almost three quarters (73%) of SMEs are planning to work past state retirement age with over one third (33%) intending to carry on working into their seventies.
The survey also revealed that 63% of business owners would like to retire by 65, but only 37% think they will be able to.
What was their motivation?
When questioned about their motivation, almost half admitted that they enjoyed their work, 31% enjoy the daily challenges of running a business and 23% stated that they are still passionate about their work.
You can read the full report here.
Tax-free childcare available for the self-employed
In a recent report, the government has announced that it will be extended tax-free childcare to all parents with children under the age of 12, which now includes the self-employed.
How to qualify
All working parents will now be eligible to claim £2,000 for each child under the age of 12, providing that they are earning more than the National Minimum Wage. Parents must be earning more than £120 per week and less than £100,000 in a year.
If they meet the above criteria, they will be eligible to open an online savings account which is used to cover costs such as nurseries, childminders and afterschool clubs.
SMEs spend 15 days a year on tax compliance
According to Federation of Small Businesses (FSB), the average small business spends 15 days and £5,000 each year on compliance.
The study revealed that the most time-consuming aspects were VAT, PAYE and National Insurance contributions. Altogether, their administrative duties took 95 hours a year combined. In addition, around one quarter of participants surveyed revealed that their taxes are difficult to understand.
What does this mean for businesses?
Mike Cherry, chairman of the Federation of Small Businesses quoted the following:
“Time and money spent by small businesses on navigating the tax system is time and money not spent on innovating, expanding and creating jobs.”
The respondents were asked what changes they believed would help to reduce the difficulties that they faced. Over half (53%) admitted that they would prefer to pay tax in instalments, 52% would like to see an early estimation of their tax bill and 40% said that automating their tax calculations would be beneficial.
Help from SJD
Here at SJD, we’re always on hand to provide help and support. If you have any questions concerning IR35, call us on 01442 330832 to chat with one of our expert accountants.