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IR35 IR35 is a term that refers to two pieces of tax laws aimed at preventing employers and employees from avoiding paying taxes. You must be mindful of the updates if you are self-employed as a Contractor or Freelancer. Your customer will bear a large portion of the burden for assessing the status of IR35. You have little to think about whether you are compliant and work properly outside of IR35. New Bill’s Proposed Changes in IR35 According to the new proposed Finance Bill of April 2020, clients from the private sector will be accountable for finding out whether contractors are excluded from IR35. Contractors who work for private-sector mid-to-large-sized businesses would be affected by the initiative. Contractors working in local businesses without the involvement of the government would be excluded. HMRC determines a small business centred on the Companies Act 2006, which specifies three key requirements to qualify as a small business that is as follow: An annual turnover can’t be more than £10.2 million. The overall value of the assets listed on the balance sheet must not exceed £5.1 million. The business hires no more than 50 employees. Application An updated web Check Employment Status Tool (‘CEST’) is accessible. The regulations that govern who is considered as applicable for IR35 purposes have not been altered. The only distinction is that the team in charge of determining this now belongs to the end customer rather than the contractor. In response, the available rules do not harm the status of a contract if it has been properly defined as either within or outside IR35 according to the current guidelines. IR35 & Account Ease (AE) Clients will be supposed to submit status information to the very first person in the labour chain of supply with which they negotiate. Contractors would be entitled to appeal their position to their customers personally if they believe a decision was taken inappropriately. According to HMRC, there must be no arbitrary evaluations that place contractors in IR35. Clients would be given guidance on how to determine their position with “fair consideration” and how the conflict process could work. It can be a tiring process for the employees and employers to make time for all this fuss. But no worries, AE is here for you to take up your all responsibility related to IR35. AE aims at providing you with these services at your doorstep with more comfort. Noncompliance for medium and large-sized Firms According to the proposed law, the team in the chain of supply nearest to the customer takes responsibility for all outstanding PAYE and NIC. The draught law does acknowledge, however, that HMRC does not enforce outstanding obligations under such circumstances. However, AE helps command HMRC to provide comprehensive advice on clarifying the measures for “fair treatment.” IR35 Compliant Account Ease is the most reliable platform for all your obligations about IR35, as paying the proper amount of national insurance and tax is all that is necessary to be IR35 compliant. The employee’s responsibility for verifying IR35 status gets transferred to the department or end customer by AE. On wages you draw during the year, you must fund state insurance and PAYE. For this, it is necessary to double-check that you’ve taken all necessary and appropriate deductions after the tax year. Businesses should be mindful of their new obligations and comprehend what IR35-compliant contracts entail. Operating in a limited partnership is normally also tax-efficient, that is all easy with our AE professionals.  

There is short-term support announced by the Chancellor in the budget. Rishi Sunak unveiled a package of support including extensions to the two major income support schemes, alongside extensions of universal credit, tax credits and stamp duty land tax. Support for business including restart grants, an extension of business rate relief, loss relief carrybacks being extended to three years and reduced VAT rates for the hospitality sector. We have summarized below the key points from the budget: Pandemic Support. While the people are going through such a challenging time, Mr Rishi extended the furlough Scheme until the end of September 2021. This Scheme pays 80% of employees’ wages for the hours they cannot work in this pandemic. This will help millions of people through “the challenging months ahead”. Organizations will contribute to employees’ wages 10% in July & 20% in August & September. The support for self-employed people will be extended until September where they will be eligible for grants such as Loans, allowances, contributions easily. A person minimum wage to increase in this budget is around £8.91 an hour from April 2021. Anyone who is an active credit claimant will get £500 onetime payment as a return. A weekly uplift of £20 in Universal Credit worth £1,000 a year is to be extended for another six months. Taxation There will be no changes adhere to rates of income tax and national insurance or VAT. A tax-free personal allowance will be fixed for people at £12,570 from April 2021 up to 2026. Higher rate income tax threshold to be fixed at £50,270 from April 2021 up to 2026 Corporation tax on company profits above £250,000 to rise from 19% to 25% in April 2023 Around 1.5 million small company tax rates will be kept at 19% with profits of less than £50,000 Stamp duty holiday on house purchases in England and Northern Ireland extended to 30 June No tax charge will be charged on sales of less than £500,000 Inheritance tax thresholds, pensions lifetime allowances and annual capital gains tax exemptions to be fixed at 2020-2021 levels until 2025-26. Health and education Remarkable support of £1.65bn for the UK’s vaccination rollout and £50m to boost the UK’s vaccine testing capability. £19m for domestic violence programs, funding network of respite rooms for homeless women. £40m of new funding for victims of the 1960s Thalidomide scandal and lifetime support guarantee. £10m to support armed forces veterans with mental health needs Business, digital and science Budget 2021 supports people to unlock £20bn worth of business investment. Firms will deduct investment costs from tax bills, reducing taxable profits by 130%. Firms will provide incentives with a rise to £3,000 and £126m for traineeships Hospitality firms will be maintained at a 5% VAT rate until September Business rates holiday for firms in England to continue until June with 75% discount after that Shops/Business that were forced to close, are granted £5bn to restart. £6,000 per premises for non-essential outlets due to re-open in April and £18,000 for gyms, personal care providers and other hospitality and leisure businesses New visa scheme to help start-ups and rapidly growing tech firms source talent from overseas. The arts and sport Nearly £400m budgeted for arts venues in England, including museums and galleries, re-open. £300m recovery package for professional sport and £25m for grassroots football & £1.2m to help stage delayed Women’s Euros football tournament in England in 2022.  The budget is what was expected, the retention of covid support and fixing of most of the tax rates is a positive sign and will bring in business confidence and certainty when markets will fully open. In these times of uncertainty if you need to consult about any of your bookkeeping, accounting or tax needs. We are providing free consultancy support to our new clients. Email: askus@account-ease.co.uk Call: 0208 133 4599  

“Instead of acting hastily, let’s think strategically” The pandemic has affected many especially small business owners. The lockdowns, border closures, trade restrictions and confinement measures have challenged the profits of businesses and their owners. Many business owners have to consider their bottom line, and in doing this, have to cut their operational costs. One of which is bookkeeping and accounts. However, even in this pandemic, businesses still have to file tax returns, maintain books, file accounts and have a record of VAT returns. Financial and cash flow management is still the key in this crisis, help from a qualified accountant is necessary and you still need guidance for new regulations and incentives such as the extension in furlough schemes and low-interest business loans. With all that is happening, it is easy to get confused. COST CUTTING & THE PANDEMIC: It is important to note and understand how businesses have coped globally during this crisis. A few of the efficient ways to curtain costs are; Budget & Expense Management Work from Home Program Involving Freelancers Employee Management – (Reduce overtime, employees, salaries)“Even in crisis, companies need to spend money to make money, ensuring the total visibility of expense and complete control over budget will go a long way toward ensuring money’s worth.”  ACCOUNT EASE & THE PANDEMIC: How is Account Ease helping businesses overcome their need to reduce accounting and bookkeeping costs, and still get quality service? This is because of our business model. Account-Ease is a collaboration of a team of Cloud Accountants in UK.  With the increased use of cloud accounting software’s such as Xero, Sage 50, QuickBooks we operate virtually. When there is no need for a physical office, we are able to cut high fixed costs, this in return is contributed back to our clients in terms of reduced fees. How does Account Ease save? We are a Cloud-based Accounting Service We work remotely (physical presence not required) & We require scanned Documents only We believe in providing high-quality service at an affordable price. BE SAFE! Account-Ease provides a Covid safe environment by letting our clients stay at home and stay safe. There is no need to bring heaps of paper and invoices to our office. You either just mail it to us or send scanned documents, we will do the rest. Grow with Account-Ease: Saving Time – Bookkeeping is a very time consuming and boring task. The good thing is we love doing it so you do not have to. Tax Return – Filing a proper tax return is necessary to avoid penalties and fines. We are very efficient in doing it. Up to Date Books – Real-time accounting is necessary for the current pandemic. If you know where you stand, you will be able to take calculative decisions. SERVICE OFFERINGS: Day to day bookkeeping services (also weekly and monthly) Annual accounts and Tax Filing Self-Assessment Tax returns VAT Services Payroll Services Management Accounting This Pandemic has forced every organization for cost-cutting globally, and every organization either it’s a startup, a small business or a Multi they must maintain their books as its compulsive. “Grow with Account-Ease” To learn more Email: askus@account-ease.co.uk Call: 0208 133 4599