Insurance Top Up Shop
Don’t miss out on VAT refunds
Businesses across Britain could miss out on a chance to claim VAT rebates ranging from tens of thousands to several million pounds, according to accountants KPMG.
It stems from a decision in the House of Lords in January this year which said that the introduction of a 'three year cap' on back-dated claims in 1996 was invalid in so far as it failed to include transitional arrangements for taxpayers making any claims relating to periods prior to May 1997.
The opportunity for refunds relates to VAT either mistakenly overpaid or rebates that were under-claimed between 1973 and 1997.
Submissions need it be in by the end of March next year and with claims typically taking several months to compile and agree, companies risk running out of time to apply for refunds.
Many businesses are unaware of the opportunity to claim rebates over this 24 year period. Stuart Hindle, indirect tax partner at KPMG in the UK, said:
“The door is open for 24 years worth of VAT claims from 1973 when the UK joined the EU to 1997 when the law was changed.
But if businesses don’t act quickly, they run a risk of losing out as all claims must be submitted by the end of March next year”.
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IT supports jobs up; management down
The number of IT support jobs being created is almost 20 per cent higher than two years ago, despite fears that offshoring would further erode demand for entry-level IT positions in the UK, according to research by ReThink Recruitment, the IT staffing company.
The research also suggests that for some senior level roles the number of jobs advertised has either declined or remained static over the last two years. The number of jobs advertised for management roles in IT has declined by 30 per cent since 2006, whilst the number of new software development roles has fallen by 18 per cent over the same period.
The International Freelancers Association
What is IFA?
The International Freelancers Association (IFA) is a recently launched organisation which will be the voice of the global freelancers. Its mission is to define and provide the infrastructure for the development of the global freelancer market. The structure enables all stakeholders, whether freelancers, service providers, end user clients, agencies, associates or others, to provide services to each other with an ease and clarity that is not available anywhere else.
What can the IFA do for freelancers?
For the freelancers, we provide jobs, low cost insurance, low cost financial services, bespoke freelancer business software, agency and client list, forums, guidance on tax and method of trading, bulk buying power, providers of accountancy services, international working and how to maximise your wealth and more in essence, all you need as a freelancer.
What can the IFA do for companies?
For companies, we provide the facility to advertise your jobs, manage freelancer responses, advertise your company, bespoke business software, eMarketing, forums, networking, low cost insurances and the opportunity to shape the freelancer market..
Who is assessing your IR35 status?
The majority of freelancers choose to assess their own IR35 status or don't bother to check it at all according to a recent survey.
According to Brookson, providers of accountancy, tax advice and other support services to contractors, who commissioned the survey, this could put many freelancers at risk of hefty tax bills in the event of an enquiry by HM Revenue & Customs.
Since IR35 was introduced eight years ago, freelancers and their advisors have been critical of the lack of clarity and certainty in the 'grey' areas of the legislation, leaving them open to challenge from HMRC as to their 'employment status' and subsequent tax position.
A number of companies offer contract review assessments or advice on contract wording. And a new market has emerged offering insurance and professional representation in the event of an investigation.
Several recent high profile cases have illustrated the uncertainty and unpredictability of the IR35 legislation, as the Commissioners reach seemingly conflicting decisions and the goal posts constantly shift.
The survey of 700 freelancers found that: *50 per cent of UK freelancers are not seeking professional advice on their IR35 status, instead choosing to assess their own compliance *13 per cent of UK contractors do not bother to check their IR35 status at all. * 27 per cent use a specialist accountancy or legal service provider to verify their IR35 status.
While some contractors follow IR35 changes and issues in great detail, for many it is impossible to keep abridge of all the technical and case law changes which affect employment law status on a regular basis. For those, professional advice is essential.
A rainy day for Umbrellas
First, freelancers had to deal with being 'disguised employees' under IR35; then composite companies were effectively closed down with the Managed Service Companies (MSC) regulations; now the UK Government's spotlight has shifted to umbrella companies.
Umbrella companies have been seen as a popular, tax-efficient way for some contractors to provide their services. But now the Government is set to take action against them, as it criticised the over-generous expenses claims which some have operated.
HM Treasury has launched a consultation paper which seeks to analyse the umbrellas and in particular the circumstances which 'enable some temporary workers to gain tax relief for travel expenses not available to others working in similar circumstances'.
It said: "There is also evidence of widespread abuse of the travel expenses rules by these structures. Non-compliance and the use of these structures to pay less income tax and national insurance contributions (NICs) lead to a loss to the Exchequer, as well as further problems."
Travel expenses
Central to the issue is the use of travel expenses. The cost of travel between home and work is normally regarded as a personal expense, putting an individual in the position to do his job, rather than an expense incurred in performing his duties. Travel between home and a permanent workplace does not attract tax relief, whether the engagement is short or long term, or the worker is engaged on a temporary or permanent basis.
However, a distinction is made for temporary workplaces where the worker goes to perform a task of limited duration, or for a temporary purpose. Tax relief is given for travel between home and temporary workplaces.
The Government has highlighted its concern at evidence that umbrella companies and employment agencies using overarching employment contracts often abuse the travel expenses rules by encouraging their workers to claim expenses which were not genuinely incurred or for which no relief is due.
Industry bodies and interested parties will be responding to the Government's consultation during the summer.
The shifting sands of income shifting
Freelancers who set up their business with their husbands, wives or partners have had an anxious few years waiting to see if the Government viewed the arrangement as a legitimate business exercise or a tax dodge. And that wait is still continuing.
Section 660 - or income-shifting - has become a thorn in the side of many freelancers who established their businesses on a 50-50 basis with their partners. In short, the Government wanted to stop the process by which an individual transfers part of their income (in dividends or partnership profits) to another person who is subject to a lower rate of tax. The Government wanted to tax the shifted income as if it had been received by the higher tax payer.
The subsequent legal and political battle seems to have been like a long-running soap-opera. Centre stage was an IT business, Arctic Systems, owned and operated by Geoff Jones and his wife Diana.
HM Revenue and Customs contested that the dividends received by Diana should be taxed, at a higher rate, as if they had been received by her husband. Leaving them - and possibly thousands of others who operated in a similar manner - with a tax bill of over £40,000.
The victories and defeats in the court system culminated in a decisive win for Arctic Systems in the House of Lords, but the collective sigh of relief from the UK's freelancing community was short-lived. A day after its defeat, the Government announced its intention to change the law.
Its proposals were met by universal criticism and the Government was forced to U-turn on its plans. But only on a temporary basis, as it announced it would delay implementation of any new proposals until 2009.
Many now hope that this means it has been well and truly kicked into the long grass for the foreseeable future. Particularly as this common practice was advocated not only by accountants, but by one of the Government's own small business advisory bodies!
Events & What’s On
Paper Tax Returns due by 31st October
HM Revenue and Customs (HMRC) has issued a reminder to anyone filing a Self Assessment tax return this year - that the deadline for paper returns is now October 31 - just a few weeks away. In the past, both paper and online Self Assessment tax returns had to be filed by January 31. But from this year, paper returns must be with HMRC by October 31, with the prospect of a £100 penalty for late filers. The deadline for filing online returns remains January 31. Once you've filed your return, any tax due has to be paid by January 31, whether you file on paper or online.
If at first you don’t succeed ...
Determined entrepreneurs whose businesses fail are dusting themselves off and getting straight back in the saddle, according to a survey of small business owners in the North West by Barclays Local Business.
The research shows that small business owners wait just four months after a business fails before they get started with their next venture.
The survey also found that men were more likely than women to have run another business, with 36 per cent of those surveyed having owned another enterprise, compared to 17 per cent of female respondents.
Don’t miss out on business rate relief
With the deadline for claiming Small Business Rate Relief (SBRR) just weeks away, a small business group is urging business-owners hit by higher rates to apply for some of the £200 million of relief that goes unclaimed each year.
Some small businesses eligible for a rates rebate are not aware of the scheme and many business-owners are paying additional property taxes, including supplementary business rates, as part of the nationwide Business Improvement Districts (BIDs) programme, but are seeing few of the proposed benefits in return for their money.
The SBRR scheme was introduced in April 2005 to give businesses based in properties with low rateable values the opportunity to ease the burden of their rates.
Research from the Local Government Association suggest that fewer than half of the 870,000 small businesses across England which qualify for the scheme have applied for it.
Small business group, the Forum of Private Business, is encouraging all small businesses which have properties with low rateable values to contact their local councils to ask about Small Business Rate Relief. The average processing time for applications is two weeks.
Classified Directory
UK small businesses lack ‘Bouncebackability’
Few UK small businesses are ready to bounce back if they have a business disruption, even though it would lose them business.
A recent survey shows that four out of five respondents would walk off to another supplier if they could not get the goods or services they wanted immediately, but only a third of managers of SMEs in the UK are taking steps to ensure that their business can continue to operate normally under any circumstances.