Tag: economy

Are you part of the ‘Gig’ economy?

Concert Rock

The ‘Gig’ economy describes the growing popularity of using workers on short term contracts on an on demand basis.

gig

There of course several issues to consider:

  1. Are these workers really employees? or self employed?
  2. How should they be taxed?
  3. What rights should they have?

These issues are being considered carefully by the Office for Tax Simplification (OTS).

What we do know is that Self Employment has been growing in popularity as demonstrated by ONS statistics.

The level of self-employment in the UK increased from 3.8 million in 2008 to 4.6 million in 2015. While this strong performance is among the defining characteristics of the UK’s economic recovery, the recent rise in self-employment is the extension of a trend started in the early 2000s.

Full-time and part-time workers each account for around half of the rise in the absolute number of self-employed workers, but the growth rate of the part-time mode has been much stronger. Part time self-employment grew by 88% between 2001 and 2015, compared to 25% for the full-time mode. As a result, part-time self-employment accounts for 1.2 percentage points of the 1.6 percentage point increase in the self-employment share of all employment between 2008 and 2015.

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/trendsinselfemploymentintheuk/2001to2015

What is also interesting is the split between male and female

self-employed-chart

Statistically Self Employed earnings are lower than those who are employed, however, Self Employed earnings are masked by fluctuating work patterns and the use of tax planning for example cars and expenses.

What are your views on the ‘Gig’ economy? is it good for Britain?

steve@bicknells.net

 

The UK 2013 Budget – Some things you might need to know….

Big Ben with city bus and flag of England, London

First the Good News……

Income tax

The personal allowance for under-65s will rise by £560 to £10,000 in 2014/15.

Housing

From 1 April, the Help-to-Buy scheme will give people who have a 5% deposit a 20% interest-free loan on homes worth up to £600,000. The qualifying period for people looking to purchase their home under the Right-to-Buy scheme has gone down to three years.

Childcare

Working families will benefit from a 20% tax relief on childcare costs, offering an annual saving of £1,200 per child under 12. The scheme will be phased in from autumn 2015.

An additional £200 million will be provided to increase childcare support in Universal Credit, with the commitment being introduced from April 2016.

Corporation Tax

Corporation tax will be reduced by a 1% to 20% in April 2015.

Employers National Insurance

Employers’ national insurance payments will be cut by £2,000 from April 2014

To take advance of the allowance, firms will simply have to inform HM Revenue & Customs, and the Treasury says it will be “delivered through standard payroll software”.

Mr Osborne added: “For the person who’s set up their own business, and is thinking about taking on their first employee – a huge barrier will be removed.”

“They can hire someone on £22,000, or four people on the minimum wage, and pay no jobs tax.”

450,000 small firms will pay no employer National Insurance.

So who are the overall winners and losers – overall we are losers!

Budget 2013

Based on Treasury analysis, the middle income families have done better than the bottom quartile and top quartile, but overall we are all worse off (based on all households).

The Economy and Borrowing are in worse shape than previously predicted

Growth forecast for 2013 halved to 0.6% from 1.2% in December

Office for Budget Responsibility (OBR) watchdog predicts UK will escape recession this year

Growth predicted to be 1.8% in 2014; 2.3% in 2015; 2.7% in 2016 and 2.8% in 2017.

The OBR predicts borrowing of £121bn this year, the same as last year, and £120bn for 2014-5

George Osborne says borrowing as a share of GDP will fall from 7.4% in 2013-14 to 5% in 2015-16

Debt as a share of GDP to increase from 75.9% in 2012-13 to 85.6% in 2016-17

http://www.bbc.co.uk/news/uk-politics-21851965

You can read the full Budget Report by clicking on this link http://cdn.hm-treasury.gov.uk/budget2013_complete.pdf

steve@bicknells.net

What did you think of the UK Autumn Statement?

Big Ben with city bus and flag of England, London

The key points were:

Individuals

Tax

• Income tax personal allowance to go up to £9,440 next year, £235 more than previously announced. The rise will be extended to higher rate tax payers.

• Threshold for 40% rate of income tax to rise by 1% in 2014 and 2015 from £41,450 to £41,865 and then £42,285.

• Inheritance tax threshold to rise from £325,000 now to £329,000 in 2015/16

• Planned 3p per litre rise in fuel duty scrapped

• Capital gains tax annual exempt amount to increase by 1% over the same period, reaching £11,100

• No new tax on property

Pensions

• From 2014/15 will further reduce lifetime pension relief allowance from £1.5 to £1.25m. Annual tax-free allowance reduction from £50,000 to £40,000

• Basic state pension to rise by 2.5pc next year to £110.15 a week

• Increase in capped drawdown limit for pensioners from 100pc to 120pc

Savings

• Overall ISA limit increased to £11,520 from next April

Business

• SME equity markets to be held directly in stocks and shares ISAs

• The main rate of corporation tax to be cut by 1% to 21% from April 2014

• Bank levy rate to be increased to 0.13pc next year

• Temporary doubling of the small business rate relief scheme to be extended by a further year to 2014

• £1bn extra capital for Business Bank

http://www.telegraph.co.uk/finance/budget/9723417/Autumn-Statement-2012-key-points.html

Department for BIS key points:

  • An additional £600 million for science, research and innovation, which takes the total investment since the 2010 spending review to an additional £1.5 billion.
  • An extra £270 million to be spent on laboratories, classrooms and other facilities in our Further Education colleges.
  • £1 billion confirmed for the business bank, which will address the long-term structural gap in lending to small businesses.
  • An extra £120 million invested in supply chains, to encourage companies to invest here in the UK.
  • The Regional Growth Fund will also receive an additional £350 million, bringing the total available in 2012-13 to £2.75 billion.
  • Extra money for the Employer Ownership Pilot, taking it to £340 million overall and giving businesses funding so they can design and develop their own training programmes.
  • Increased funding of £140 million for UK Trade & Investment (UKTI) to help small and medium sized business export abroad.
  • £1.5 billion to help our smallest companies to access growing markets overseas. For the first time UK Export Finance, the Government’s export credit agency, will be able to issue loans to overseas customers and buyers wanting to purchase goods from UK businesses.
  • A package of measures to cut back red tape that business has told government stops them from growing.

http://www.bis.gov.uk/news/topstories/2012/Dec/autumn-statement-2012

Britain’s small businesses were given a boost in the Autumn Statement when the Chancellor instigated a tenfold increase in allowances on capital spending such as tools, office equipment and commercial vans to £250,000.

http://www.standard.co.uk/business/business-news/autumn-statement-uturn-on-allowances-will-help-small-firms-8386468.html

steve@bicknells.net

Rent a Room and earn up to £4,250 tax free

You can receive up to £4,250 a year tax-free (£2,125 if letting jointly) by letting furnished rooms in your home. This is known as the Rent a Room scheme.

It doesn’t matter how much you earn from other sources – you still get the full tax-free amount.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804

In the current economic climate renting a room is becoming an increasing popular method for boosting income and there has been an increase of 52% in the number of new homeowners taking in lodgers in the past two years.

On average UK room Rent is £406 per month rising to £717 in London.

Accroding to www.spareroom.co.uk

So this could well be worth considering if you need extra cash.

steve@bicknells.net