Welcome to the News & Blog

Here at ClearSky, we want to keep you up-to-date with all the latest hot topics that may affect you and your business. This could be anything from IR35 to new legislations.

Please feel free to browse the various categories, individual posts and make your comments known to the author.

Thinking of going Limited? Come on in, the water’s great!

For many people, the idea of becoming their own boss is extremely appealing. The most common route is to set up a Limited company, as it allows the individual to benefit from a wide range of perks, including unbeatable tax efficiency and considerable protection in the event of financial problems.

New research from polling organisation Ipsos MORI and HMRC finds that incorporating a business is generally a smart way to make money, as 65% of Limited company contractors reported a healthy profit during 2012-13. This is compared to 19% who made a loss and 9% that only managed to break even.

The overwhelming majority (80%) of company directors would recommend incorporation to those considering making the leap from traditional employment. Perhaps unsurprisingly, this figure rose to 94% among those individuals who earned £50,000 or more per year. … Continue reading

By Tim Moore Beecroft,

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Proud to support the self-employed stars of the future

At ClearSky, we recognise the significant contribution that contractors and the self-employed make to the UK’s economic prosperity. That’s why we are immensely proud to be associated with a nationwide competition to find Britain’s best independent worker.

The 15 for 15 initiative from the association of Independent Professionals and the Self-Employed (IPSE) is designed to reward the nation’s up and coming entrepreneurs and give them the opportunity to reach their full potential. It is part of the association’s campaign to make 2015 the year of the independent professional.

Chris Bryce, IPSE’s chief executive, said: “Self-employment is no longer the preserve of a chosen few. It is a viable option for anyone who wants to strike out alone and take control of their own destiny.” … Continue reading

By Tim Moore Beecroft,

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Are past RTI errors returning to haunt HMRC?

HMRC’s controversial Real Time Information (RTI) reporting system presents “real and serious” problems for employers and taxpayers, according to a leading tax body.

This withering assessment of the taxman’s flagship project was made by the Association of Tax Technicians (ATT), which called for an “urgent review” of the system. It claimed that employers were facing a “significant burden” at a time when it was crucial for HMRC to build confidence in the legislation.

It alleged that the Revenue failed to listen to ATT advice during the system’s inception, while also ignoring similar warnings from other tax bodies. … Continue reading

By Tim Moore Beecroft,

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Recruiters enjoy billings bonanza

Recruiters are basking in a sustained period of growth, as temporary billings surge for the seventeenth month in a row.

This is according to the latest Report on Jobs survey from the Recruitment and Employment Confederation (REC) and KPMG, which found that agency fee income from contractor and temp placements rose at a “strong and accelerated pace” in September.

In what was described as a “perfect storm” of market conditions, the study also revealed that contractor assignment rates rose at the fastest pace since 2007, fuelled by strong private sector demand. Healthcare and engineering remained the biggest sources of opportunities. … Continue reading

By Tim Moore Beecroft,

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Graduate salaries: ‘geeks’ have the last laugh

Often the butt of jokes, computer scientists are seemingly getting revenge on their counterparts when it comes to graduate salaries.

New figures released by the Higher Education Statistics Agency (HESA) find that those with computing degrees feature three times in the top 10 earners list. Top of the pile are those from Oxford University, who are able to command wages of £43,895 just six months after graduating.

Degree holders from Imperial College London’s ‘compSci’ courses came in fifth place, with an earning power of £39,060. Meanwhile, computer scientists from Cambridge can look forward to a salary of £38,195. The report also finds that software consultancies, technology companies and banks are the three main employers of computer scientists. … Continue reading

By Tim Moore Beecroft,

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Taxman goes psychological in quest for cash

HMRC has unveiled its latest weapon in the fight against late tax payments – guilt.

The revelation was made by chief secretary to the Treasury, Danny Alexander, who announced that the taxman has employed a team of psychologists to “subtly alter” the wording of reminder letters. A similar “nudge” method is being used to encourage tax evaders to pay up outstanding liabilities and clarify their tax position.

HMRC claims the changes were made as a result of “large scale” trials in which the Revenue pinpointed the “exact words and concepts” designed to make people more likely to pay their dues. It estimates that the alterations have already led to an estimated £210 million of additional income. … Continue reading

By Tim Moore Beecroft,

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New HMRC cash grab gets green light

HMRC has been granted the ability to plunder even more money from high earners’ pay packets, under powers that came into force this week.

The Revenue can now collect up to £17,000 per year in tax debts direct from wages. This is an increase of over 466% on the £3,000 it was previously allowed to withdraw.

HMRC sought to raise the limits on the debt it can retrieve from the pay-as-you-earn (PAYE) system, claiming it was unfair that it had been forced to use more expensive debt recovery procedures when seeking larger sums. It estimates the new measures will raise £115 million for the Treasury in the 2015-16 tax year. … Continue reading

By Mike Youds,

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Taxman goes digital

HMRC has launched its new digital strategy, designed to help taxpayers and businesses engage efficiently with the department. It will allow users to access their tax statements, tax codes, make payments online and file their tax returns.

Central to this idea is the creation of personalised digital tax accounts, based on a “multi-channel digital platform.” HMRC will also implement a system that uses data and intelligence about taxpayers to give them a more bespoke service.

The plans have been outlined in a new strategy document, in which HMRC pledges to be “more consistent and responsive in the way we provide our services.” It also promises to manage customer contact flexibly through a range of communication channels. … Continue reading

By Tim Moore Beecroft,

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Is poor IR35 advice costing you money?

Ask any contractor which piece of legislation causes them the most headaches and they will nearly all give the same response – IR35. The controversial law has been labelled a thorn in the side of many freelancers, due to its complex nature.

To combat this, many contractors turn to accountants for advice. However, a new study by news site ContractorCalculator finds that a large number of freelancers are paying more tax than they need to, due to the incorrect information provided by so-called ‘experts.’

More than half (56%) of contractors surveyed falsely believed that receiving a salary of £10,000 or more would automatically protect them from IR35, while just 9% were aware that low wages and high dividend was the most tax-efficient course of action to take. This comes despite 92% of respondents claiming they were at least fairly familiar with the regulations. … Continue reading

By Tim Moore Beecroft,

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Are HMRC cuts behind the rise in tax evasion?

Deep cuts to HMRC’s workforce could explain a worrying rise in tax evasion, according to a new report.

Figures released by the Public & Commercial Services (PCS) union show that the Revenue’s staff numbers have shrunk by around 33% over the past nine years. The number of employees working for the taxman dropped to 62,000 this year, down from 92,000 in 2005.

More cuts are expected, with the service set to shed another 10,000 jobs by 2016. This follows June’s announcement that 23 offices will close and last year’s loss of 281 walk-in enquiry centres. … Continue reading

By Mike Youds,

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