Updated Her Majesty’s Courts & Tribunal Service has been forced to pay the UK taxman £12.5m due to incorrect assessments regarding the employment status of contractors under controversial IR35 rules.
Disclosed in the court service’s annual report [PDF], the payments were a result of a challenge from Her Majesty’s Revenue & Customs (HMRC) to the Ministry of Justice’s handling of IR35 rules between 6 April 2017 and 5 April 2020, which had concluded workers were operating outside of the off-payroll working rules.
Under IR35, contractors, many of whom work in IT, that are “deemed employees” by HMRC need to pay income tax and National Insurance as though they are employees but are not entitled to benefits such as holiday or sick pay.
The government introduced changes to the IR35 rules that came into force in April 2021 and made large and medium-sized businesses responsible for determining the employment status of contractors for tax purposes, rather than the contractors themselves.
What is IR35?
IR35 is a tax reform that was unveiled in 1999 by the UK tax authorities. The latest regulation change will force medium and large businesses in the UK to set the tax status of their contractors and freelancers. Previously this was set by the contractors themselves.
Contractors found to be within the scope of the legislation – ie, inside IR35 – will have to pay more tax than they might expect.
The reforms are part of the government’s crackdown on so-called disguised employment, where workers behave as employees but avoid paying regular income tax and national income contributions by billing for their services through personal service companies (PSCs), which are taxed at lower corporate rates.
The measure came into effect in the public sector in 2017. The British government hoped the reforms would recoup £440m by bringing 20,000 contractors in line.
HMRC reckons that only one in 10 contractors in the private sector who should be paying tax under the current rules are doing so correctly. It estimates the reforms will recoup £1.2bn a year by 2023.
In this case, the court service workers seem to have been miscategorised because of its use of the HMRC’s Check Employment Status Tool (CEST), according to Seb Maley, CEO of Qdos, an advisory firm for contractors.
He pointed out that the Department of Work and Pensions had admitted an £87.9m IR35 liability and the Home Office paid £33.5m under similar circumstances.
“Given that HMRC’s fundamentally flawed CEST was used to decide the IR35 status of contract workers, I’m not in the least bit surprised that mistakes have been made,” he said.
“Here we have proof yet again that the taxman’s very own IR35 tool threatens compliance rather than ensuring it. Businesses should avoid it altogether or at the very least get a second opinion on every answer it provides.”
The CEST tool has been slammed for returning inconclusive responses for one in five of the million-plus times it was called upon during a 16 months period.
Dave Chaplin, CEO of IR35 Shield, said: “HMRC’s CEST tool is failing fast and now we are hearing of yet one more government department, because it has relied on CEST to assess its contracting workforce. It is crucial that once you hire a worker on an ‘outside IR35’ basis that you continue to monitor the status throughout the engagement. Regular checking and gathering contemporaneous evidence are crucial in forming a pre-emptive defence.”
Her Majesty’s Courts & Tribunal Service has been contacted for a response. ®
Updated to add at 15:48 UTC:
A Ministry of Justice spokesperson said: “Strict checks and extra controls have been introduced to ensure that tax rules are applied correctly.”
Good news for those in the UK with primary school-aged kids and wondering what to do when the next bout of home-schooling hits: design a logo for the first UK satellite launches.
2022 could be a big year for launching satellites from Blighty’s shores as the first launchers gear up for a historic blast-off. Assuming the facilities have been built and all the necessary consents given and boxes ticked.
There are currently seven possible spaceport sites across the UK, from Cornwall in England through Llanbedr in Wales and up to the Western Isles in Scotland. Cash has been lobbed Cornwall’s way to support a horizontal launch by Virgin Orbit from Spaceport Cornwall and more toward Scotland for Orbex’s ambitions to launch vertically from Sutherland.
Should all the approvals happen and construction be completed, there is every chance the UK might host its first launch at some point in 2022.
Hence the need for a logo and thus a competition aimed at inspiring kids to consider a career in the space industry. And, of course, it is all worthy stuff: “Logo designs,” intoned the UK Space Agency, “should reflect how data from small satellites can help inform solutions to climate change as well as generate a source of pride in the UK’s space ambitions.”
What, we wondered, could possibly go wrong?
We put this question to Rob Manuel, one of those behind web stalwart b3ta.com. B3ta has a long history of (among other things) image challenges, the results of which tend to pop up, often unattributed, in timelines around the world. Now heading into its third decade, the site continues to push out a weekly Friday newsletter to email subscribers.
In terms of how to engage participants, Manuel said: “If anyone asks me, and they rarely do, I encourage competitions to be as open as possible – publish the results as they’re coming in. Try and create a buzz that something is happening rather than everything going in the bin.”
“As for things going wrong,” he went on, “well, there’s always an element who’ll want to subvert it.”
The competition is open to children aged 4-11 and will run until 11 March 2022. There are two age categories (4-7 and 7-11) over 12 regions in the UK. Designs can be drawn, painted, or created on a computer and either submitted on the logoliftoff.org.uk site or via post. Some basic questions also need to be answered, and children can work on their own or in a team of up to four.
We asked the UK Space Agency if it would take Manuel’s advice and post entries ahead of the competition close. We will update should it respond. ®
The Galway tech start-up was one of two winners at the sport-focused pre-accelerator programme.
A start-up developing real-time video analytics for sports has been named ‘most investable’ at SportX, a new pre-accelerator in Ireland for founders with sports and wellness business ideas.
RugbySmarts took the title at the inaugural SportX showcase last week, securing a cash prize.
The Galway-based start-up aims to automate and simplify sports analytics using AI, machine learning and computer vision, helping coaches to improve player and team performance with a platform that could also be transferred to other sports.
RugbySmarts was founded last year by CTO William Johnstone, who has previously worked with Connacht Rugby, and CEO Yvonne Comer, who is a former Ireland international rugby player.
Meanwhile, the award of ‘best impact on sport’ was given to TrojanTrack. This start-up, founded in 2021 by Dublin-based Stephen O’Dwyer, is looking to combine quantitative biomechanical analysis with deep neural network tech in the equine industry.
The aim is to gain feedback on a horse’s injury or gait imbalance without using invasive technology, such as motion-tracking software that requires markers to be attached to the animal’s skin.
‘Next-gen sports-tech entrepreneurs’
SportX was launched earlier this year by advisory firm Resolve Partners, Sport Ireland and ArcLabs – the research and innovation centre at Waterford Institute of Technology.
The aim of the pre-accelerator programme was to build on tech and business ideas for the sport and wellness industries, giving founders access to academic, clinical and commercial resources.
The six-week programme involved workshops and engagement with advisers, entrepreneurs, subject experts and investors. Participants also had the opportunity to pitch to the US-based Techstars Sports Accelerator.
At the SportX showcase last week, nine teams had five minutes each to pitch their business ideas to a panel of judges.
The two winners were selected by the panel, which featured Gary Leyden of the ArcLabs Fund 1 GP, Sport Ireland’s Benny Cullen and Niall McEvoy of Enterprise Ireland.
At the launch of SportX earlier this year, Leyden said the goal of the programme was to find “the next generation of sports-tech entrepreneurs who can leverage the amazing enterprise and sports-related supports within the south-east of Ireland”.
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If you are stuck for ideas for Christmas gifts this year and looking for something more exciting than socks, here are some gadgets that might be just the ticket.
From folding phones, headphones and VR headsets to smart speakers and eco-friendly phone cases, all of these great gadgets are excellent, built to last and won’t end up languishing in a drawer or, worse, the bin.
The most ethical, repairable smartphone you can buy someone has had a big upgrade for 2021 and has a more modern design, 5G and faster chips. The Fairphone 4 is built to last, with software support until 2027 and a five-year warranty.
It still contains plenty of recycled and ethically sourced materials, has modular parts you can replace yourself with just one small screwdriver, and a removable battery, which is good for about two days.
The camera is still a work in progress, there’s no headphone jack and it isn’t the fastest smartphone you can get but it does the job with little fuss. Fairphone will recycle an equivalent device for each unit sold, making the phone e-waste neutral, too. You are paying about £200 more than for a comparable phone from the company’s rivals but that helps pay the factory workers who make the Fairphone a real living wage.
Not only is the Z Flip 3 a cutting-edge piece of technology but it’s a great phone to boot. Samsung’s reinvention of the flip phone puts a 6.7in flexible screen in the centre of a classic clamshell design, giving it the best of both worlds: a big, luscious screen to rival superphones and a compact size, which means you can actually fit it in your pocket when folded up.
Good cameras, top performance and good software with at least four years of updates, plus water resistance mean you are not losing anything compared with normal phones that cost just as much. Plus, there is something very satisfying about closing the phone to hang up on a call.
When it comes to a tablet for watching TV, playing games and reading the Guardian, Apple’s basic iPad is the best option for most people. The recycled aluminium body is solid, the 10.2in screen is good and the speakers are decent. The powerful chip, long battery life and 64GB of storage will be enough for apps and games. Very long software support means the tablet will last years, too.
The brilliant new 12-megapixel “Centre Stage” camera automatically pans and scans to keep you in view for video calls. Apple’s App Store has all the media and tablet apps you could want, and accessories such as keyboards and cases are widely available if you want to use it more as a computer.
Apple’s switch from Intel processors to M1 chips of its own design has transformed the MacBook Air from a low-power thin and light machine into the best consumer laptop you can buy. The M1 chip is superfast and powerful but enables gamechanging battery life in excess of 16 hours of work – multiple days away from the charger are now possible.
It has no fan, so runs totally silently, the screen is great, the keyboard and trackpad are first class, the sleek body is made out of recycled aluminium and it contains recycled tin and plastic, too.
The webcam isn’t the best and it only has two USB-C/Thunderbolt ports but you have to spend a significant amount more to beat the M1 MacBook Air.
Ikea’s partnership with the wifi-speaker maker Sonos has created some novel devices. Following on from a shelf and a lamp that double as speakers, comes the Symfonisk picture frame, which hides a speaker behind art on your wall – and it sounds surprisingly good.
It can be hung or leant against the wall, streams music over wifi from almost any music service available and can even be linked up wirelessly as a pair with another or as part of a seamless multiroom audio system. It still needs a power cable running down your wall but you get a choice of white or black frames and the art print can be swapped out easily for a choice of others – though not yet your own print.
It has wifi for directly streaming music at home, supporting practically every music service under the sun and Alexa or Google Assistant voice control. It has Bluetooth, too, for hooking up your phone on the road. It is water-resistant, durable, light and compact but packs a big, quality sound. It lasts 10 hours on battery, charged via USB-C or wireless charging in the base. It can even be part of a multiroom audio setup with other Sonos speakers. Sonos promises to support the Roam for at least five years after it stops being sold but has a history of doing so for much longer and you can get the battery replaced if it wears out.
Sony’s top wireless headphones have an unwieldy name but are absolutely fantastic. They are superlight and comfortable even for extended listening sessions, have 30+ hours of battery life, are available in a choice of colours and fold up neatly for travel.
They have extremely effective noise-cancelling that works equally on flights or a commute. They also sound brilliant, producing the kind of sparkling audio that will have you discovering new details in well-worn tracks. They have a great set of touch controls for playback and volume, plus they can connect to two devices simultaneously via Bluetooth but have a cable, too. They are even repairable and you can replace the battery if it wears out, which is rare in the world of headphones.
If you want to give a set of wired headphones that sound great and will go the distance, you can’t go far wrong with these. Super comfortable with spacious ear cups and a well-padded headband, they sound brilliant with neutral, balanced audio that has made them extremely popular with music producers. Crank up the music and enjoy. Their closed-back design stops everyone else from being able to hear what you are listening to but they can only block a small amount of outside noise. They fold up fairly compactly and feel as if they can take a beating.
The cable is removable and the headphones are generally repairable, so if something does break you don’t have to bin them. Audio-Technica also makes a version with Bluetooth for a little more money.
Samsung’s latest true wireless earbuds are its best yet. They don’t skimp on features, with a solid Bluetooth 5.2 connection, good active noise-cancelling for blocking out the commute and great sound. They have good touch controls for playback, last for up to five hours of music and charge fully three times in the compact case.
The app for updates is only available on Android and they are only splashproof. But they are more repairable than most true wireless earbuds, so it is possible to replace the battery and fix them if something does go wrong.
The best smartwatch you can get for an iPhone. Its big screen, comfortable fit, 50m water resistance and slick performance are unrivalled. It doesn’t hurt that it has some of the most comprehensive health and fitness tracking features available, including the ability to take an ECG. It is made of recycled aluminium and has a reasonable selection of third-party apps, too, including Spotify with offline music downloads. If you don’t want the ECG or an always-on screen the Watch SE is cheaper at £249.
The Oculus Quest 2 from Meta (AKA Facebook) is a breakthrough in virtual reality headsets that jettisoned the need for cables and a powerful PC to create a simple, immersive set of goggles you can just strap on to enter a completely different world. The headset is powerful enough to make the experience smooth and convincing. It is pretty light and comfortable. The battery lasts about three hours, and there’s an ever growing library of games and experiences, including from big-name brands such as Star Wars, Beat Saber and Resident Evil.
The recipient will need a Facebook account and enough space to walk and swing their arms around but there’s nothing quite like it for escapism.
Google’s second-generation Nest Hub puts the company’s voice assistant in a good-looking 7in smart display made from 54% recycled plastic. With no camera to worry about, it makes a good alarm clock. It can wake you with a sunrise effect and sound, and you can silence alarms by waving your hand at it. It also features radar-based sleep tracking with no need to wear a gadget. The screen can be a brilliant digital photo frame for all your favourite snaps.
Google Assistant is useful, and the speaker’s pretty good, able to play radio including BBC, Spotify and others, or stream music via Bluetooth from your phone, making it just as good in the lounge or kitchen.
As a small smart speaker to play music and the radio, set timers and answer questions, the cute ball-shaped Echo Dot is great. Simply ask Alexa for BBC or commercial radio and you’re away. The speaker is better than competitors’ and loud enough for small rooms. You can turn two into a stereo pair. It supports most common music services over wifi, or you can connect your phone via Bluetooth or the 3.5mm analogue jack on the back.
It comes with or without a hidden LED display for the time or alarms, and contains recycled fabric, plastic and aluminium.
Working from home can be a bit of a drag, so adding a little bit of luxury to the computer your loved one is stuck in front of for hours on end can make it a little more bearable for them. Logitech’s latest rechargeable Bluetooth keyboard is a compact version of its brilliant MX Keys. With some of the best laptop-style typing you can get, it makes every key-press responsive and satisfying, while not taking up too much room on a desk.
It is made from up to 30% recycled plastic, works with multiple platforms and can pair to up to three devices at once, quickly switching between them at the press of a key, has an automatic backlight and plenty of customisation options, too.
The Ocean Plastic Mouse is a special edition of Microsoft’s Bluetooth Mouse, which is made with 20% recycled plastic cleared from the ocean and given a cool speckled look. It will last up to 12 months on an AA battery (use a rechargeable) and you can mail an old mouse to Microsoft for recycling.
When it comes to bags to truck gear around there are plenty of options but few have quite such a storied history as Targus – the inventor of the first personal computer carrying case in 1982. The latest EcoSmart range of Targus laptop bags includes backpacks, cases and sleeves, which are made from up to 26 recycled plastic bottles each.
Pela makes good-looking cases that add grip and drop protection to your phone – and don’t have to end up as landfill once you’re done with them. The cases look and feel like fancy regular plastic cases but are made from a starch-based polymer mixed with flax straw, which makes them more environmentally friendly to produce and compostable at the end of their life.
Cases are available for a large range of phones, with various clear and arty designs to choose from.