January is often a time of business and admin housekeeping, as we attempt to slough off the difficulties of 2021 and start the year with a fresh slate. For many, the first major housekeeping hurdle is the self assessment deadline. Getting your self assessment in on time will help prevent fines, although this year HMRC has given a bit of breathing room for anyone who is struggling to file before the deadline.
In other news, the government is taking steps towards regulating the umbrella industry by asking for evidence from service users. Read on to find out more…
For anyone self-employed as a sole trader, or a partner in a business partnership, and who hasn’t already filed a paper self-assessment (the deadline for which was 31st October 2021), the January self-assessment deadline can be a challenging time.
And following IR35 changes in April, there will be some contractors who will be required to fill out a tax return for the first time.
But ensuring that the 20-21 self assessment is filed by 31st January 2022, and readying themselves for their tax bill, is a bitter blow for contractors so soon after Christmas.
HMRC has offered a bit of relief this year though, in the form of waiving late filing and late payment penalties for one month. The deadline of 31st January remains in place, but those that manage to file their tax return online by 28th February, and those that pay their tax in full or set up a Time to Pay arrangement by 1st April, won’t face penalties.
But don’t get too comfortable. Interest will still be due from 1st February, as usual, so we do recommend that you still file your tax return by the deadline where possible.
Talk to us if you need any advice regarding your self assessment deadline.
The government has invited those that have experience in working for umbrella companies to come forward and discuss their experiences, in the next step towards umbrella company regulation.
In an unregulated industry, there are of course untrustworthy companies who often lure contractors with impossibly low tax rates. Many of these companies are offshore and take advantage of the lack of control in the industry, leaving contractors out of pocket, at risk of being found guilty of tax avoidance, and with no right to reply.
Compliant umbrella firms who ensure that the correct tax and NI is paid have long been calling for regulation, with many wanting to be able to prove their compliance.
The government recognises that reputable umbrella companies are facilitating a flexible labour market, by providing a useful service to contractors and employers alike. But ensuring that contractors are protected from exploitation is important, in terms of correctly paid tax and NI, as well as holiday pay and transparency regarding umbrella fees.
The UK government is inviting contractors to come forward and answer a range of questions to help them gather evidence about the role of umbrella companies in the current labour market, so they can begin to look at areas where regulation is required. The consultation closes on 22nd February 2022.
And, in another move to help protect contractors against the risks posed by dishonest umbrella providers, HMRC has recently provided a new tool for contractors to check whether they are paying the right amount of tax. Contractors can input details from their pay slip and check if they’re at risk of tax avoidance.
JMK is proud to be leading the way for a reputable umbrella industry in 2022 and beyond.
Since 2002, JMK have been compliantly consolidating back-office, accountancy and payroll functions.
We have evolved to provide a range of expert services; such as Back Office Support (BOS) or Funding, becoming a leading provider to the contracting industry.
We know every agency is different in some shape or form, even if only by a little, but important bit. Combining our knowledge and experience of multiple sectors enables JMK to support you all from recruiters and payroll, through to finance, compliance and management.
With JMK as your trusted partner, even the smallest team can process the largest payroll, regardless of payroll type.
Have a look at the wide range of services our Back Office Support (BOS) or Funding can provide to you and your business, it is far more than just payroll and finance.