Freelancers want to see Chancellor Rachel Reeves use the Autumn Budget to move towards a fairer, simpler tax system, according to the Association of Independent Professionals and the Self-Employed (IPSE).

IPSE’s research found that 80% of freelancers believe that government tax policies, such as IR35, are harming their businesses.

Meanwhile, just under half of freelancers reported having less confidence in the UK’s economic outlook for the coming year compared to the past 12 months – down from 63% in findings from Q1 2024.

IPSE’s Director of Policy, Andy Chamberlain, said:

‘For the past two years, the impact of record high inflation has been the main story in the business world. But for millions of freelancers, who are our very smallest businesses, the biggest barrier to growth has always been the tax system.

‘This is about more than just rates of tax. Convoluted tax rules like IR35 are crushing freelancers and the businesses they’ve worked so hard to build.

‘Rachel Reeves faces her first big test as Chancellor with a Budget in October and has made no secret of the need to raise money. But freelancers will be hoping that the Chancellor is also open to building a fairer, simpler tax system for millions of sole proprietors going it alone.’

Internet link: IPSE

The number of self-employed people aged 60 or over has reached a record level, according to analysis by Rest Less.

These numbers have increased by over a third in the past decade, totalling 991,432 self-employed people aged 60 or over in 2023.

The analysis found that while the number of self-employed workers in their 50s and older has grown since 2021, it is those in their 60s who have set the new high.

The total number of workers who are self-employed is about 4.3 million, after a two-year recovery following a sharp fall during the pandemic, according to the research.

Stuart Lewis, Chief Executive of Rest Less, said:

‘With the state pension age soon to be 67 and set to go higher still, many people are choosing to work beyond the point of traditional retirement.

‘For many, self-employment is a great option as it allows people to remain active and engaged in the community and workforce whilst also providing greater flexibility – leveraging their skills, experience and network to make an impact.

‘The decision to go self-employed can be driven by wildly different sets of circumstances from people living comfortably and pursuing an entrepreneurial passion to those who are forced to generate an income and have not been able to find a permanent solution in the mainstream workforce.’

Internet link: Rest Less

HMRC is failing on the key metrics of responsiveness, ease and accuracy, according to the annual HMRC Charter report.

The report reviewed HMRC’s performance against its Charter from April 2023 to March 2024.

The survey received over 1,600 responses, with complaints about service levels a recurring theme.

• ‘Being responsive’ scored the lowest of the Charter standards, with an average score of just 2.4 out of 10.
• ‘Making things easy’ and ‘getting things right’ also scored poorly, at 2.8 and 3.5 respectively.
• The remaining standards – ‘being aware of your personal situation’, ‘treating you fairly’, “recognising that someone can represent you’, ‘mutual respect’ and ‘keeping your data secure’ – scored higher at 4.1, 5.0, 5.7, 5.6 and 6.8 respectively.

Richard Wild, the Chartered Institute of Taxation’s (CIOT) Head of Tax Technical, said:

‘Significant time is lost every day for members, their clients, and indeed HMRC themselves, due to delays and inefficiencies in dealing with HMRC.

‘The three standards on responsiveness, ease and accuracy were by far the lowest scoring, which is disappointing as between them they represent the health of the tax system.

‘Businesses are prevented from operating effectively due to the inability to obtain timely registrations or responses. Taxpayers’ legitimate refunds are withheld or delayed. Guidance and correspondence from HMRC is misleading or incorrect. All these things are inhibitors on growth and investment.’

Internet link: GOV.UK CIOT

The British Business Bank has launched the Growth Guarantee Scheme to help smaller businesses access finance.

The Growth Guarantee Scheme is the successor to the Recovery Loan Scheme and is expected to support around 11,000 smaller businesses.

The British Business Bank has so far accredited 41 lenders for the scheme which will run until March 2026.

The scheme supports term loans, overdrafts, asset finance, invoice finance and asset-based lending facilities. Not all lenders will be able to offer all products.

Minimum facility sizes start at £1,000 for asset finance, invoice finance and asset-based lending and £25,001 for term loans and overdrafts. The maximum facility sizes are up to £2 million per business.

Martin McTague, National Chair of the Federation of Small Businesses (FSB) said:

‘We are delighted that the British Business Bank has officially launched the Growth Guarantee Scheme, to get much-needed finance to start-ups and scale-ups, so they can grow.

‘The new scheme will help small firms get the funding they require to be able to achieve their dreams.

‘The Growth Guarantee Scheme will be an important part of the funding landscape for small firms, whose growth will be an indispensable ingredient in overall economic recovery in the UK.’

Internet link: British Business Bank website FSB website

HMRC will send Simple Assessment tax statements to pensioners in the next few weeks.

The combination of frozen tax thresholds and a substantial increase to the state pension has led to many more pensioners being dragged into paying income tax for the first time.

The last government froze the personal allowance at £12,570 until 2028.

The full new state pension saw a 10% increase in April 2023 to over £10,600 annually, followed by another 8.5% rise in April 2024, taking it to more than £11,500 per year.

HMRC says that pensioners will receive a Simple Assessment where there is an underpayment of income tax for a tax year that cannot be collected automatically via PAYE and they are not subject to income tax self assessment.

An underpayment of income tax can result from:

• pensioners who receive income from the State Pension, occupational pensions, employment pensions, and most taxable state benefits
• pensioners with up to £10,000 of untaxed income (for example, from savings or investments).

HMRC will use the information it already holds and information supplied from banks and building societies about people’s income and tax situation.

The tax authority will calculate any tax owed or refund due and the Simple Assessment tax statement will show the calculation.

HMRC says taxpayers will need to check that their Simple Assessment statements are correct before paying any tax due.

Please contact us for advice on Simple Assessment matters.

Internet links: GOV.UK