Macroeconomics Global stock markets have soared following on from the bout of announcements from Pfizer and Moderna on the developments of a vaccine with a 94.5%…
Cornwall’s growth in popularity as a global tech destination and the positive impact this is having in our local tech community, was highlighted in BBC Radio 4’s recent broadcast of their trip to meet some of the county’s digital nomads. You can still catch it on their podcast here if you missed it.
“A new army of digital nomads is wandering the world. Equipped with a laptop and willing to work anywhere that has Wi-Fi and a low cost of living, they are changing the way millions think about the world of work. But how do firms and governments adapt to a fast moving, ever changing highly skilled and paid workforce that doesn’t even recognise borders? And do digital nomads represent the future of work or a threat to taxation systems and therefore the nation state? From Portugal to New Zealand via Cornwall.” – Blurb from Radio 4 website.
The status of ‘workers’ has been an on-going dilemma, which is becoming more apparent with such disrupters as the digital nomad, who can take up camp wherever offers the best internet connection, coffee and waves! It has also been seen more recently in more traditional sectors, with disrupters like Uber. I believe we are at that tipping point where it becomes the norm.
So are they a ‘worker’, ‘employed’ or perhaps ‘self-employed’? Each status having different statutory rights and tax treatments and the need for clarity was highlighted in the Taylor review of modern working practices.
Another practical way of operating is via an intermediary such as a limited company, but for those involved in the software industry need no introduction to IR35 – quite possibly the most convoluted tax legislation out there. My colleague Scott Campbell, who specialises in this field, pointed out that even this recent HMRC tool isn’t fool proof. Perhaps it’s no surprise for the complexities it was trying to encapsulate.
Whilst the changes to how dividends are taxed have reduced the potential tax savings by operating through a limited company, IR35 is still relevant and there is no harm checking what side of the fence you are more likely to fall on and the steps you can take to ensure you do land on the right side.
As accountants, we are already seeing how technology is also being disruptive in our own industry and the growing popularity of cloud accounting products is having a profound effect.
This innovation means that our clients can be nomads, work where they like and we can still assist them, as the information is accessible remotely giving us both real time information to make business decisions. Although I do caveat it with the computer science acronym GIGO (Garbage In, Garbage Out) – the key for any good system to work effectively is that it is set up properly for its requirements.
And then we get into cross-border issues… I’ll save that for a VAT blog for another time!
Software Cornwall – Tech Connect – 31 May
For those aspiring digital nomads looking to set up camp in Cornwall (and why not, it obviously has the best coffee, Wi-Fi and beaches), Software Cornwall are holding their quarterly Tech Connect event at Goonhilly Earth Station on the 31 May, which enables the tech community and its supporters to connect and share their skills and knowledge.
I will be there myself joined with my colleague, Jackie Oddy to give a five minute lightning talk about R&D tax credits to ensure those tech and software companies are aware of what they could be claiming. More information about the day can be found here.
I look forward to seeing you there.