Anna’s Accountancy Alerts – Week 8 (24th – 30th May 2021)

Male Carpenter In Workshop Doing Accounts On Laptop

Changes to IR35 and its impact on the self-employed

The Association of Independent Professionals and the Self-Employed (IPSE) has stated that the recent changes to the rules relating to off-payroll workers, commonly known as IR35, ‘undermine the self-employed at the worst possible time’.

The changes took effect on 6 April 2021 and shifted responsibility for making the decision on employment status on each contract away from contractors and personal service companies (PSCs) and on to the client receiving their services.

Research carried out by IPSE found that 50% of contractors planned to stop contracting in the UK once the changes took effect unless they could secure contracts unaffected by them. 24% are planning to seek contracts abroad; 12% plan to stop working altogether; 17% will seek an employed role; and 11% are looking to retire within the next year.

Additionally, 24% of contractors said their clients are planning to blanket-assess all their contractors as ‘inside IR35’. 

Andy Chamberlain, Director of Policy at IPSE, said:

‘The changes to IR35 would do serious harm to the self-employed sector at the best of times, but now they are adding drastic, unnecessary damage to the financial carnage of the pandemic – undermining the UK’s contractors at the worst possible time.

‘The crucial problem with IR35 is still its complexity: in fact, it is so complex that HMRC has lost the majority of tribunals on its own legislation. And there remains serious doubts about the CEST tool HMRC designed to supposedly cut through this complexity.’

See the link: IPSE website

Kickstart scheme

The Confederation of British Industry (CBI) has urged the government to extend the Kickstart Scheme to help young people.

The Kickstart Scheme was launched in September and promised to pay the wages and associated employment costs for businesses taking on 16 to 24-year-olds in receipt of Universal Credit up to six-month contract periods.

Around 813,000 workers have been cut from company payrolls in the last 12 months as the pandemic adversely affected the jobs market. People under 25 accounted for more than half of the jobs lost in the year to March, it added.

Matthew Percival, Director of People and Skills at the CBI, said:

‘Evidence continues to mount that it is young people’s jobs that have been hardest hit by lockdowns. Support for jobs and training will be vital to making the UK’s economic recovery inclusive.

‘Government should confirm that the extra lockdown at the beginning of the year means that the Kickstart Scheme will remain open for longer to allow businesses the time to deliver opportunities for young people.’

New 95% mortgage scheme launched

The scheme will help first-time buyers or current homeowners secure a mortgage with just a 5% deposit to buy a house worth up to £600,000.

The government will offer lenders the guarantee they need to provide mortgages that cover the other 95%, subject to the usual affordability checks.

The scheme is now available from lenders on high streets across the country, with Lloyds, Santander, Barclays, HSBC and NatWest having launched mortgages under the scheme and Virgin Money following shortly.

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