The Tax Changes Small Biz Owners Aren’t So Happy About
Now that business owners have had time to digest the tax changes and discovered the ways in which they will affect their businesses, it seems that over 69% of small business owners aren’t all that happy. Let’s dig a little deeper and see what the changes are and why they’re unsettled.
Employee Pay + Pensions
If you employ staff this is going to affect you. The national living wage is increasing to £7.83 an hour, rising from £7.50. This might sound like a mere 33p, but if you employ 5 full time workers on 40 hours a week it can add up. In this simplified example you’re looking at an extra £3400 in a year.
On to pensions now, where employers have to pay in 2% to their employee’s pension pot, this is up from 1% last year and will be increasing next year to 3%.
IR35 – Change is Ahead
To stem the perceived issues with IR35 infringements a decision has been made to reform IR35. This change will take the form of a shift in responsibility in determining employment status. It has always been down to the worker to determine this, but now the onus will be on the hirer/client to determine the worker’s employment status.
Tax is, Unsurprisingly, Going Digital
Many small business owners seem to have their feathers ruffled at the mere mention of tax going digital – getting used to a new procedure and developing new process. But perhaps it represents a positive change, one with less paperwork and a quicker turnaround.
If you’re not quite sure how these tax changes, especially when it comes to IR35, are going to affect you and you want some clarity on where you stand – we can provide it, get in touch with us here and we’ll be more than happy to help.