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7 top predictions for the self-employed in 2020 – from a new tax to ‘worktels’

5-minute read

Sam Bromley

20 December 2019

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After an uncertain few years for small businesses and the self-employed, what does 2020 have in store for you?

We’ve collected seven of our top predictions. From a new Simple Consolidated Tax to ‘worktels’, look out for these in 2020 (and beyond).

Will businesses start using 5G?

5G is the next upgrade for mobile phone networks. It promises to be much faster than current 4G technology.

5G should give you more flexibility as to where you work, and on which tasks, as communication with your clients, customers or coworkers based elsewhere is made easier and more efficient.

And if you need to change your working location regularly – for example, if you work on location in film and TV – 5G’s lower technical requirements mean it’ll be easy to set up a connection for existing devices through a WiFi router.

As for access to 5G, some areas already have 5G and phone networks are set to continue gradually rolling it out during 2020.

But some providers seem to be having trouble – Three’s plans to launch mobile 5G services in 25 UK towns and cities by the end of 2019 have been delayed until the first weeks of 2020.

And while only higher-end phones have 5G capability at the moment, Apple is expected to launch 5G-ready phones in 2020. This could lead to more phone manufacturers including 5G technology as standard in their handsets.

Will new off-payroll working rules be ‘reviewed’?

Changes to off-payroll working rules (known as IR35) are being introduced in 2020. The change will affect self-employed contractors and freelancers who work through their own personal service company.

From April, the responsibility for determining your IR35 status lies with end clients (although smaller firms are exempted). The government introduced the change for the public sector in 2017 and are now extending it to the private sector.

But during the Conservative Party’s election campaign, Chancellor Sajid Javid committed to reviewing the upcoming change.

While contractors should look out for more details of the review, given the short space of time before the new rules come in it’s unlikely that any meaningful changes will be made.

The message for self-employed contractors, consultants and freelancers (and those who employ them) remains the same – continue preparing for reform. With three months to go, make sure you’re communicating with your clients (or recruitment agencies).

And there are steps you can take if you want to protect your IR35 status, including proving you run a legitimate business and that you could send a ‘substitute’ in your place to do the work. Speak to an independent IR35 expert if you’re not sure.

Read what is IR35? for more information.

Is there a place for the office in the future of work?

The self-employed should keep an eye out for more flexible office spaces over the next few years.

The Workplaces Future report, by Nespresso Professional and the Future Laboratory, claims that by 2030 “we will see dramatic change as office design creates hyper-flexible, human-centric spaces to inspire new levels of productivity.”

This means that traditional office spaces may end up transformed by the end of the new decade. This could be good news for the more flexible way of working that the self-employed enjoy.

What should you expect to see? The Workplaces Future report suggests:

  • ‘worktels’ – hospitality-inspired workspaces with “space for people to work, play and to stay”
  • resilience culture – a foundation for future workplaces that “enable physical, mental and emotional wellbeing”
  • ‘biophilic’ design – offices that mimic the environments we find in nature, designed to reduce stress and increase productivity

Is HMRC’s Making Tax Digital ‘grace period’ ending?

There were calls to delay Making Tax Digital for VAT but the government introduced it as planned in April 2019.

Since then HMRC has quietly been making concessions for small businesses as part of a year-long ‘leniency’ period. For example, HMRC didn’t issue fines after one in four businesses failed to meet the first deadline for submitting digital VAT returns on 7 August.

And The Telegraph reported in November that businesses with “complex or legacy IT systems” would have a further year to comply with the rules. This means they won’t need to file their returns until April or October 2020.

HMRC said it would introduce “a process to apply for additional time so that businesses are not penalised while making their best efforts to comply with all other MTD requirements.”

Even with all this in mind, most businesses will need to continue to meet their Making Tax Digital obligations – especially when HMRC’s ‘grace period’ ends in April 2020. Read more about Making Tax Digital.

Is 2020 the year of the ‘story’?

Social media has evolved quickly. It used to be about the news feed but now stories are taking over.

What does that mean for you? Firstly, if you’re not using social media to promote your business, 2020 could be a great year to start.

Secondly, the shift to stories represents a move away from stale news feed updates to more visual communication. This is something you can take advantage of – for example, personal trainers can post short clips of their workout routines, or graphic designers can show their followers some personal projects they’re working on. How can you use stories for your business?

If you’re new to social media, start with Facebook and Instagram and see how you get on.

Will there be a Simple Consolidated Tax?

Our tax system is notoriously complex. It’s one reason why the Conservatives have pledged to “launch a review to explore how we can better support the self-employed.” They said this will mean “improving their access to finance and credit (not least mortgages), making the tax system easier to navigate, and examining how better broadband can boost homeworking.”

Back in May, we reported on a study by the Centre for Policy Studies (CPS) that proposed a voluntary ‘Simple Consolidated Tax’, which would replace the current range of levies and taxes that small businesses face.

Small businesses seemed to be in favour of the proposal, with almost three quarters saying they’d use the new system if it meant they paid the same amount of tax. More than a quarter said they’d use the system even if it meant paying more in tax.

Sajid Javid, who was Home Secretary at the time, said: “This report shows how bureaucracy and paperwork are stifling the growth of our small businesses and offers a series of compelling ideas for how government can roll back the tide and show that the Conservatives are backing entrepreneurs.”

Now Sajid Javid is Chancellor, will he consider the proposal put forward in this report in a future review?

Will the new Small Business Commissioner solve late payments?

Ex-Small Business Commissioner Paul Uppal was “forced to quit” the role in October, meaning the position is currently vacant.

But retail payment authority Pay UK claimed in November that small and medium-sized companies are currently waiting for £23.4 billion in late payments, so it’s an issue that won’t go away in 2020.

In their election manifesto, the Conservatives said they will clamp down on late payments – but will that translate to concrete action this year?

In the meantime, see our top tips for chasing late payments from customers and suppliers – including a downloadable template you can use to save time.

What are you expecting to see in 2020? Let us know in the comments below.

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