July is over and it’s time again for our monthly roundup. Here is our recap of all of the latest from the world of contracting from the past month.
HMRC confirms date for Making Tax Digital
From April 2019, HMRC has confirmed that businesses with an annual turnover of more than £85,000 will be required to maintain digital VAT returns and to submit quarterly digital returns alongside the annual tax return.
Under the new system, all data transfers of software must be made using a digital link. This soft-launch is due to be the first phase in a series of rollouts until the new system is a mandatory requirement in 2020. Currently, only businesses which meet the VAT threshold are required to use the new system, but those who do not can register voluntarily.
Changes to IR35 testing
The government announced that they intend to scrap one of the deciding factors, Mutuality of Obligation, when it comes to determining whether a contractor is inside or outside of IR35.
This is yet another talking point after months of speculation for what the future holds for IR35 amidst fears that the private sector will be shaken up.
Mutuality of Obligation outlines the requirement of the end client to outline what they need and to pay for it, and in turn for the contractor to undertake this work.
To find out more, read HMRC’s full report.
The self-employed are not being paid by clients
A study by the Independent Professionals and the Self-Employed (IPSE) has revealed that the self-employed are not being paid for the work that they have completed.
In association with Involvement and Participation Association (IPA), IPSE surveyed 800 sole traders to reveal that a staggering 43% finished a project which they were never paid for at some point throughout their career. There was a unique caseof a self-employed individual who had been underpaid by £60,000 for their work.
The problem only worsened for 18-34-year-olds, as the figures show that 58% have been unpaid for their services.
In order to combat the issue, IPSE recommends that the government establish laws which make prompt payments mandatory.
Savings fall in 2018
A study published by Aldermore has revealed that the level of savings has fallen compared to last year, despite the average wage increase. This year, the level of savings dropped from 8% to 7%.
Of the 4,009 respondents surveyed, almost one third admitted that they have not saved in the past three months. Amongst those who had saved money, 53% revealed that they did not believe it was adequate.
Of particular concern was individuals nearing retirement – 39% of respondents aged between 45-64, in particular, believe that they aren’t saving enough for the future.
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