IR35 Reform: Changes to Tax Rules for Off-Payroll Workers

IR35 New Self-Employment Tax RulesIn April 2017, HMRC reformed the rules for intermediary employment in the public sector. The aim of this reform is to ensure that freelance workers and the companies that employ their services are paying the correct amount of tax they owe to HMRC. Before this change, it was the responsibility of the worker to decide if the IR35 rules applied to their business. Now it is the responsibility of the public authority acting as the employer to make that decision and to confirm that they are both obeying the law.

Failure to comply with these rules can be considered as tax evasion, which means that severe penalties can be applied by HMRC if the rules have been intentionally ignored.  The financial secretary Mel Stride recently suggested that this reform could be extended to the private sector in the future, so it is a good idea for all self-employed freelance workers and any agencies hiring them to make sure that all such work statuses are properly disclosed to HMRC.

Check Your Employment Status for Tax

How can you find out which tax rules apply to your status as an employer or an employee? To aid you in this process, HMRC has implemented a fast and easily accessible service known as CEST (check employment status for tax).  You can use this anonymous service to check the status of public and private work engagements, and it does not store the information that is provided. CEST is the only service result that will be considered conclusive and accepted by HMRC. If your situation is too complicated for CEST to provide a conclusive status on which tax rules apply to you, you will need to contact HMRC directly with any IR35 enquiries. Queries can also be sent to HMRC by email or post.

If you are self-employed and work for other companies through your own personal service company, you must report your employment status to HMRC. Contact the Self Employed Helpline for advice by phone, or find the specific services you require help with on our Self Employed Helpline page (including registering a new business and queries about tax and National Insurance). Whether your services are hired in the public sector and the IR35 reform currently applies to you, or they are hired in the private sector, you should always check that the person who is responsible is obeying the rules set by HMRC to avoid any penalties.

How Does the IR35 Reform Affect Self-Employment?

The crackdown on non-compliance has caused some controversy with the people whose earnings have been impacted as a result of the updated tax rules. However, HMRC’s tax assurance commissioner Jim Harra has pointed out that contractors avoiding paying the tax they rightfully owe is detracting from funding for public services such as hospitals and schools. Millions of pounds a year are lost to tax avoidance, so it is important that people are paying the right amount of tax. Those who are paid through personal service companies will no longer be taxed more lightly than traditional employer-employee payment arrangements. The IR35 reform for self-employment in the public sector and any further reforms applied to the private sector will continue to create a fairer employment market for everyone.

Your rights as a parent in the UK

Your rights as a parent in the UK

Whether you’re a new parent in the UK, or you’re looking to up your knowledge around your rights as a full-time parent or a parent in work, below is a guide for you. As a parent in the UK, you’re entitled to some rights and you should be aware of them. Read on to learn more about Maternity Rights, Leave, Breastfeeding, information on Adoption leave and more.

Maternity Rights

When you’re pregnant in the UK, you could be entitled to maternity pay and leave from your work. Maternity allowance is usually less than your current pay, but it will still be a sufficient amount to live on whilst you’re away from work. When you’re on Maternity Leave, you may choose to work some days either from home or in the office. If this is the case, pay can be discussed with your employer.

If you are not given your maternity rights, or you feel as though you have been discriminated against, there are steps you can take against your employer. Firstly, talk to your employer about your rights. If they still decline to provide you with your rights, you should then speak to your trade union. If you do not have one, you can speak to ACAS who can assist you further.

If you’re an employee, you will be entitled to maternity leave. If you are self-employed or work a zero hour contract, you will not be entitled to leave or pay when it comes to your maternity. At least 15 weeks before the arrival of your baby, you must tell your employer that you are pregnant, and when your baby is due. You must also inform them of when you would like to take maternity leave, and when you would like to come back from taking your leave. When asking for your maternity leave, it’s best to have your MATB1 form with you or to give it to your employer when once you have it. These forms are given to you around your 20-week scan.

What you will earn when on maternity pay and leave can differ. However, you can calculate how much you will be on from the citizen’s advice.

Paternity Leave

If you are a new father, you will be given two weeks paternity leave when your partner has the baby. If you have recently adopted a child, you can also take paternity leave for 2 weeks. In order to qualify for paternity leave, you must have had the same employer for 26 weeks, be the biological father of the child, be responsible for the child and have given your employer the correct notice. Notice periods differ depending on the company you work for, discuss notice periods with your boss before discussing leave further with them.

During paternity leave, you will be given statutory pay. Leave can start on the day your child is born or the day in which the child is placed in your car through adoption.

Breastfeeding Rights

When you have given birth, you will still have the same health protection as when you were pregnant. In the UK, it is legal to breastfeed in public, this rule should apply to many offices, however, this is down to the company. Discuss your rights with your boss before breastfeeding in public in order to avoid any unhappy situations with co-workers.

Shared Parental Leave

Shared Parental Leave is a right given to those who are adopting a child together, or who are having a surrogacy carry their child to term for them. Shared leave means that the parents can have up to 50 weeks off together, with up to 37 weeks of those paid by your employer. To be eligible for shared leave you must share the care of the child, have had the same employer for 26 weeks, and still be employed by the same employer at the time the adoption takes place.  The amount you are paid on share parental leave will be decided by your employer, and pay should be discussed when you tell your employer of your adoption.

Hospital Appointments

If you have worked for your current employer for over a year, you are entitled to take time off in order to look after your children. Up to 18 weeks is the amount you can take off if your child is below the age of 5, or under the age of 18 if the child is disabled. If you are pregnant, you are also entitled paid time to attend antenatal appointments, and for each appointment, you can take up to 6.5 hours paid time away from work.

Named and Shamed: The Companies that Treat their Workers Unfairly

Do you ever wonder what goes on behind the scenes of items you buy from popular retailers? We are all guilty of looking of wanting a particular item of clothing so much, or wanting a completely ‘new wardrobe’ that we won’t spare a second thought for anything apart from how good it will look when we’ve bought it, the cheaper the better. If we take a moment to stop and think about where the things we have bought have come from or who made it possible for you to quickly buy your items of choice, there really is a lot more to it than we think. Recently, there has been a great scandal around well-known sports retailer Sports Direct and the payment of its workers as well as the factory workers of popular online store ASOS. The claims that they are unfairly treated and underpaid were just the start of it, and we are looking further into what actually happens behind the scenes of shopping.

ASOSASOS workers

ASOS is a much-loved fashion brand and online retailer that is used by millions of people everyday. Their popularity derives from a number of factors, including their budget friendly prices, their huge list of much-loved fashion brands, their tendency to always be offering some kind of discount or sale and they’re free and usually considerably speedy delivery process. Using ASOS is a great way of avoiding the high street shops battle and also gives you access to clothing from high street brands that you may not have in your area. All in all, ASOS makes for an all round winner when it comes to buying their reasonable quality clothing. But what is just beneath the surface? Reports have emerged that conditions in the ASOS warehouses are becoming more and more like slavery, with workers rights completely out of the window (there have been reports that they have even been refused toilet breaks in fear of targets being missed). It’s all well and good that ASOS are capable of delivering such a speedy service, but do people ever stop and wonder why it is so efficient, and with what expense?

Buzzfeed news conducted a three-month investigation following reports that a female member of the warehouse staff had suffered a panic attack due to the intense environment in which she was working. To make matters worse, she was later dismissed. What they found was a complete lack of consideration for workers of ASOS and a desperate need for change amongst the community. The root of the problem seems to be the somewhat unrealistic targets that are set by the managers, and in a bid to make sure all of these targets are fulfilled (all orders need to be dispatched within 48 hours, even sooner if a customer has paid for next day delivery) workers are missing out on basic rights such as drinking water and going to the toilet. This essentially means their job is affecting their health. ASOS has come under public scrutiny leading up to, and in the wake of, the investigation, with Labour leadership contender Owen Smith criticising their use of flexible contracts which means there is little to no stability for the workers, with reports of shifts being cancelled last minute and workers being sent home with no pay. The greed of the ASOS bosses and their desperation to meet targets means constant invasive surveillance of workers which has now been deemed inappropriate by the House of Commons Business Select Committee.

After Buzzfeed conducted several interviews with current ASOS staff, one worker put everything into a nutshell and compared the treatment of workers to slavery. The discouragement of toilet and water breaks is justified by management claiming that even ’30 seconds’ are extremely important to the company. Buzzfeed found that agency staff are exploited further by being put on contracts that allow assignments to be ended without notice and also see ASOS using a flex up, flex down policy which allows management to take away or extend a shift at short notice, and reward workers with time off rather than money for any additional hours worked. Of course, pay is docked if an employee enters the building even a single minute late (15 minutes pay is traditionally docked for even 1 minute of lateness). Unsurprisingly, ASOS has denied any claims of exploitation and continues to list the positives to working for such a diverse and well-known brand, including language learning schemes, subsidised canteen food and  a 3m pounds air con system to keep factories cool. It seems, that all of the mistreatment and unrealistic performance targets is a direct result of the ambitions to develop the ASOS empire, with the CEO himself once saying that he wanted ASOS to be the ‘Amazon of fashion.’

Sports DirectSports direct logo

After months of speculation, it was finally admitted by Sports Direct owner Mike Ashley that staff that worked in the store did get paid less than the minimum wage. He is now facing a multi-million pound bill for his crimes, and, rightly so. The unfair treatment was first discovered after The Guardian conducted an investigation and found that the pay given to workers was below the legal requirement. The revelations have forced people to begin to question Mike Ashley’s competency as director of the company. As well as paying workers less than the minimum wage, there was also a number of other issues that were brought up in the court case against Sports Direct and these included; workers being docked 15 minutes pay for being one minute late, and general incompetency amongst all of the Sport’s Direct top management. It was claimed that Mike Ashley was running Sports Direct like a ‘Victorian Warehouse.’ HMRC itself was forced to investigate the minimum wage abuse and Mike Ashley has since confirmed that they are in talks to negotiate a deal for pay back to full-time workers. It has been stated that the fine issued to Mike Ashley and Sports Direct has the potential to one of the highest national minimum wage fines in history.

Naturally, after the parliamentary inquest into Mike Ashley’s company, he has received a lot of contempt and as a result lost a lot of business. People are offended by the total lack of respect and dignity his company has shown towards its workers, especially in 2016. Evidence suggested that Mr Ashley himself visited the Sports Direct headquarters in Derby around once a week so it seems impossible that he was not aware of what was going on around him, and because of this, he must be held accountable. It seems that once again the low cost items that we all know and love have come at a cost to the workers that make it all possible.

 

Can I check my National Insurance contributions online?

National Insurance contributions are made by everyone in the UK, and allow you to qualify for other benefits such as the State Pension. You pay National Insurance contributions automatically if you are over 16, an employee making £155 a week, or are self-employed and earning more than £5965 in profits each year.Can I check my National Insurance contributions online?

Before you can make any National Insurance contributions, you need to have a National Insurance number. You can find your personal number on your payslip, p60, or letters about tax sent to your address. There are seven different types of National Insurance, and you are placed into the relevant band based on your job and income. Class 1 is for employees earning more than £155 a week, and their National Insurance contributions are automatically taken away from their paycheck each month. Class 2 is for those who are self-employed , and their National Insurance contributions are paid through their self-assessment forms, which must be filled out manually each year. To find out which National Insurance band you fall into, contact the National Insurance Helpline, who can help you with any query you have regarding your National Insurance contributions.

The amount of National Insurance you pay can be between 2 and 12%, and you must inform HMRC if you change your address and or start/stop being self-employed.  To check which National Insurance band you fall under, we advise ringing the National Insurance Helpline. For this, you will need some personal information such as your name, date of birth, address, and NI number. If you wish to check your National Insurance payment record, you can do so on the government website. Again, you will need to have some personal information ready in case you are asked for it. If you wish to check if you qualify for the State Pension, or if you wish to find out how much you could receive on the State Pension, you can also do this online. However, you will need a log in to do this. You can create a login by following the instructions on your screen.

Recent figures show that almost 80% of UK residents do not know how many years you must pay National Insurance contributions in order to receive the full State Pension amount when you reach State Pension age. This shocking new statistic also found that 57% of citizens estimate they only have to pay 10 years less than the minimum amount of years. It was also found that 33% of UK citizens did not know that taking long periods of time off of work, for example for maternity leave or sick leave, resulted in not being awarded the full State Pension amount. With 55% of the population critically needing to take this time off, more people need to be made aware of exactly what impacts their State Pension.

You must have made 35 years of contributions with you National Insurance in order to qualify for a new state pension, which is five years more than previous years. Those who have made lower than 10 years worth of contributions towards National Insurance may receive nothing at all in terms of a State Pension. Many have called for an update by the government on the rules regarding National Insurance contributions, and for the legislation to made easily and readily available. If you wish to check your current National Insurance contributions, you need a log in with the HMRC, you also need personal information on yourself to get the information. Surely there should be a service whereby you can check up on all of the information regarding your National Insurance, what it contributes to, and exactly what you will receive when you start receiving your State Pension with the government.

It’s thought a change in legislation, and the ability for it to be more accessible by the UK public, will enable more and more people to engage with their monthly payments and review their pension options. Many people rely on the state pension. However, if they have only been contributing for less than 10 years, they will see nothing from the government whatsoever.

Many have called for the UK public to check their National Insurance contributions, and start a private pension pot or fund. This way, you will you have a back up in terms of money to live on if the state pension somehow falls short when you reach state pension age. Many young people are avoiding the issue of their pension in favor of spending their money for short term gain. This tactic is believed to send the economy on a downward spiral in future years. Young people are now being urged to keep an eye on their finances and plan for the future, as it may be starting to look bleak very soon.

If you would like to check your up to date contributions, you can do so on the government website, or by ringing the National Insurance Helpline. You can also fill out a structured email with the HMRC, who aim to be in touch with all applicants within two weeks.

How to be a Great Employer

how to be a great employer

Sometimes, employers can be unaware of exactly what makes a great company…well…Great! We’ve compiled a short list of all of the ways an employer can empower and motivate their workers and keep them wanting to strive for more.

Flexi time

This is great for building trust with your employees. Flexi time allows for workers to arrive between certain hours and leave after they have worked for a set amount of time. For example, workers can arrive from between 8am and 9.30 am – as long as they achieve 8 hours of work in that day- they can leave at their respective times. Employers should know that their employees have lives outside of work, and that sometimes lives get in the way of work. If a worker needs time in the morning to take their children to school, or fix a broken boiler, they can use flexi-time in order to avoid being late for work, making it easier for employers in the long run. This trust takes the anxiety out of the morning commute, and allows for more focus on the task at hand when they do make it to their desks.

Creative work environment

A work environment shouldn’t be cold and uninviting, why not invest in a pool table or ping pong table, and create a tournament amongst your workers? Or, have monthly dinners together at predetermined restaurants. When your employees are friendly with one another, the work environment seems a lot more welcoming, and cultivates a great workspace environment. Team building exercises also ensure a great work ethic. Why not set a monthly date with all of your workers and head out for a coffee? This way you’re taking them out of the work space environment and learning to bond with them outside of work. Once you have a relationship outside of work, you may find that it’s easier to communicate your feelings inside the office, which is vital.

Listen to your employees

Sometimes you need to listen to what your employees need in their work environment. Some may wish for certain incentives in the work place. Perhaps you could buy a trophy for your newly created pool tournament? Or you can buy weekly fruit baskets to keep your workers happy and healthy. Listening is key to great communication between employee and employer, maybe hold a meeting once a month and ask people what they would like to see more around the office to help them with work? Google is well known for listening to their employees. For example, one of their employees asked for more rubber ducks around the office. The next week? Thousands of rubber ducks appeared around the entire building! Alternatively, you could set up a Skype group for the office, this way you can be contacted discreetly. Sometimes, employers may become anxious to even approach you, Skype eliminates this encounter, allowing for more free flowing conversation.

Be approachable

how to be a great employerWhen you’re running a business, it can be hard to come across as approachable and accessible. Sometimes, workers need a helping hand, and they might not always ask for it. It helps to be friendly with your employees, let them know you’re there if they need you. Once you have this trust, you can open up a dialogue about work and other important avenues. It also helps if your employees know you’re available to talk one on one. If your office is in a small space, it can be impossible to talk without everyone else listening in. This is where Skype comes in handy once again – enabling private conversation without prying ears around the office, and allowing for a more casual conversation above email and meetings.

Incentives

Depending on your company or business, why not introduce work place incentives? Vouchers for those who meet their monthly targets allows for healthy competition amongst emplloyees, and gives them something to work towards. Alternatively, create a trophy for those who have produced the most outstanding work that month. A small personalised trophy doesn’t cost much, and can be fun in an otherwise stale work environment.

Pay a relevant wage

Wages can be tricky, but as long as you are paying your employees the right amount for their skills and workload, you will have no issues. It’s also a great idea to review pay each year, in order to keep on top of what you’re paying each individual, and whether they deserve less, or more, than they are currently on. If you would like advice on what the best rate of pay is for your business, ACAS can help. ACAS offers impartial advice for both employee and employer. So, if you would like to talk to them regarding an issue in the work place, a member of staff will offer help in any way they can. For more information on ACAS, visit the ACAS contact number page.