I hope everyone is well and following the social distancing. It’s been strange at home, with all my three children and trying to be a teacher! I am very fortunate to live in the middle of nowhere and I can easily walk my dog and get plenty of fresh air. At least the sun is shining!
There has been so much information out there since all the different Government announcements. Most people are covered under one of the schemes. Unfortunately, some are not.
Here is a review and link of all the support that’s available.
So the Government has announced mainly for the coronavirus breakout and how it will help those that will struggle through the containment stage. From the perspective of a small company the following has been introduced
Those on small business rates relief will be able to gain a £3,000 cash grant in England. At the moment, not clear how this will be accessed.
Retail, leisure and hospitality (including hotels, restaurants and coffee shops) with a rateable value of less than £51,000 will pay no business rates for the whole year.
Pubs with a rateable value below £100,000 will have an increase on their business rate discount from £1,000 to £5,000 in England.
Statutory sick pay will be refunded for the first 14 days for Small to Medium Sized business with fewer than 250 employees.
Statutory sick pay will be paid immediately for those that have to self isolate, instead of the usual 3 days waiting period.
A Business Interruption Loan Scheme will be set up, lending small businesses on amounts up to £1.2m
Bank of England have dropped interest rates from 0.75% to 0.25%.
National Insurance for employees (not employers) will increase to £9,500.
Employment allowance up from £3k to 4k, for those with a NI bill under £100k
Updated IR35 news, there will be a 12 month soft landing approach for businesses implemented IR35. Medium and Large business will make the decisions whether your business is in or outside IR35. You do have the right to appeal with our client, but it seems they could easily refuse to cooperate. Please read the report below, which also has a link to the HMRC update too.
One million people have missed the deadline to complete their self assessment tax return. If you have completed a self assessment in the past, but you no longer have different income streams, you must still compete a return, unless advised differently. Those now late will be charged a £100 late return notice, even if there is no tax to pay. This can only be overturned, if you have a genuine excuse. Don’t leave any later, otherwise that penalty will keep rising!
IR35 was brought into bridge the gap between those self employed and intermediaries who in fact should be employed. So for example two people work for a company, they do the same tasks and job. One is employed and one is a limited company. The person who works under a limited company might fall under PAYE and is not in fact limited.
Introduced in 2000, IR35 was for an individual/contractor to assess their contractual relationship. HMRC would then challenge contractor if they believed they should be employed. The end users would become involved in the relationship set-up.
Two years ago, IR35 was revised for the Public Sector, the end user (Client) now assesses whether a contractor falls under IR35. In April 2020, this will roll out to the Private Sector. HMRC have clarified this will happen, but maybe some minor alterations. Large companies, such as RAC, have requested that the Chancellor either delay or cancel, but to no avail.
Currently, the end user has been more risk averse than expected, and removing many of their contractors and recruiting staff. Many contractors, have found themselves either moving permanently or finding new clients.
Will it affect your business, some simple questions will assist in this decision. If you answer yes, its a stronger case for self employment.
Do you have multiple Clients? Each assignment would be judged individually
Any income from non-contractual sources?
Do you have your own website, company email address, marketing and advertising?
Do you have your own logo, company stationery, letterheads?
Do you use your own equipment for contract purposes – laptops, phones, cars, printer etc?
Are you registered for VAT?
Do you have business insurances, such as liability, indemnity?
Do you have a dedicated office space?
Do you tender for contract work and apply for contract positions?
Are you registered under the Data Protection Act?
Do you invest in training, development and other ways to improve the marketing of the company?
Do you have control and direction of what you can do in your daily work?
You receive no benefits, such as use of staff facilities, social events, gym membership etc?
Do you have a substitute if you cannot perform the tasks?
You are paid by the job/task and not hourly/daily rates
You are not continuously with the same Client and renewing the contract.
How to prepare?
read press releases/guidances
strategies to prepare for outcomes, such as PAYE costs