Off-payroll working rules going ahead:
The draft Finance Bill clauses issued for consultation on 11 July include legislation to extend the “off-payroll” working rules to the private sector from 6 April 2020. These changes will have significant implications for workers providing their services through personal service companies and also the end user organisations that engage such workers.
End users will be required to determine whether the worker would have been an employee if directly engaged and hence the new rules apply to the services provided by the worker via his or her personal service company. This will be a significant additional administrative burden on the large and medium-sized businesses who will be required to operate the new rules. The current CEST (Check Employment Status for Tax) online tool would be improved before the proposed start date.
“Small” businesses will be outside of the new obligations and services supplied to such organisations will continue to be dealt with under the current IR35 rules, with the worker and his or her personal service company effectively self-assessing whether the rules apply to that particular engagement.
The draft Finance Bill confirms that the definition of “small” is linked to the Companies Act 2006 definition.
This is where the business satisfies two or more of the following conditions:
• Annual turnover of £10.2 million or less
• Balance Sheet total of £5.1 million or less
• 50 employees or less
There will be an obligation to pass details of the status determination down the labour supply chain. The liability for tax and national insurance will be the responsibility of the entity, paying the personal service company. However, if HMRC are unable to collect the tax from that entity, the liability will pass up the labour supply chain, thus encouraging those entities further up the supply chain to carry out due diligence.
Please contact us if you would like to discuss how the proposed changes are likely to impact on your business.
IHT relief for businesses and farms:
There is currently a very generous 100% relief from inheritance tax for passing on businesses and farm land during lifetime and on death. The rationale for Business Property Relief (BPR) and Agricultural Property Relief (APR) is to enable businesses to be passed on without the need to sell off assets to pay the IHT due on the transfer.
Currently if a business is wholly or mainly for the purpose of investment, then it will not be eligible for BPR. This is not always straightforward to determine. Many estates include both trading and non-trading business assets, and establishing whether this test is met can be difficult to establish. The ‘wholly or mainly’ test is generally considered to be a greater than 50% test and the OTS are suggesting that the test should be aligned with the much stricter 80:20 test that applies for CGT gift of business asset holdover and entrepreneurs’ relief. If introduced many more business transfers would be liable to IHT.
On the positive side the OTS have recommended that IHT business property relief should be extended to include Furnished Holiday Lettings aligning the tax treatment with that of Income Tax and CGT where they are treated as “trading” providing that certain conditions are met.
Make time for your own personal development:
As a leader in your firm, you are focused on developing the people around you. But who is responsible for your own development? If you want to help your employees to grow and develop, you need to invest time in developing yourself, as a leader. In order to focus on your own personal development, you need to schedule time to do so. If you don’t, your team and your business could outgrow you and your own career could stagnate.
Lead by example
If you want your team to take the time to invest in their own personal development, you need to lead by example. If you make time to learn and develop new skills, your team are more likely to follow suit. You may even be able to make suggestions to your team members, based on your own learning and development experiences.
Learning and development doesn’t have to involve taking several days out to attend a conference or training session. There is an ever-expanding range of learning opportunities available online. The beauty of this is that you can take courses and attend webinars at a time that works for you.
Find a topic that interests you
There is no point trying to develop your skills in an area that you have no interest in. You want to feel motivated and keen to develop new skills. Do your research and find a development opportunity that you are passionate about. Personal development should be an interesting opportunity, not a chore.
Distractions can be a good thing
Focusing on your own personal development gives you an opportunity to step back from your day job. We often come up with our best ideas when we are off doing something new or exciting. Taking time away from the day-to-day can help to provide new perspectives on things and re-evaluate your priorities.
When you get back to your desk, you may have new ideas and you should feel re-energised
Have any questions?:
Feel free to get in touch using the ‘Contact Us’ page if you have any questions relating to this month’s news.