What is the Autumn Statement?

The Autumn Statement 2014

This year’s Autumn Statement is on the horizon, and the UK waits with baited breath as we approach the next phase for our economy and come to terms with what the latest forecasts and action plans mean for us, especially within the contractor sphere. If you’re not sure what the Autumn Statement involves, or what it means for you as a contractor, and need a breakdown of this major event on the economic calendar, we’ve got everything you need to know right here.

What is the Autumn Statement?

At 12:30pm on December 3rd, Chancellor of the Exchequer George Osborne will be bringing the British public its annual Autumn Statement. Here Osborne will address Parliament, providing updates on the Government’s plans for the British economy – using the latest forecasts from the Office for Budget Responsibility (OBR).

These crucial forecasts, known as the Economic and Fiscal Outlook (EFO), are published publicly twice every year, at the Budget and at the Autumn Statement. Put simply, the forecasts take a look at the British economy’s future performance – with this December’s Statement offering insight up to the 2018-19 period.

During the Autumn Statement, the OBR will offer their latest statement on UK economic performance, as well as insight into how the British government is performing against its own fiscal objectives. The Government’s primary objective is to balance its budget – meaning the amount the Government spends on things like welfare and the NHS must be equalled by the amount brought in through taxes.

The Chancellor will also be addressing MPs on the matter of government taxation and illustrating further cuts to public spend – which are, again, based on the OBR’s forecasts. Changes to tax legislation will be introduced – and likely further addressed in the March 2015 Budget – which are necessary to fund the Government’s spending plans.

What does it mean for contractors?

Working on an independent and unfixed basis can feel like your needs are secondary to the permanent contract majority – which is why it’s even more important to keep yourself informed on the Autumn Statement and its implications for you. This is particularly significant in terms of newly introduced tax measures, which will be implemented in order to deliver on the proposed budgets – with anti-avoidance measures proving an especially (and unsurprisingly) hot topic this year.

With contractors looking for a sense of certainty over tax legislation, as well as some pro-enterprise thinking, the 2014 Autumn Statement has the potential to significantly impact on the financial security of contractors and freelancers. Labour and the Conservatives’ recent acknowledgement of the contribution made by temporary workers looks promising – offering a feeling of optimism for contractors who, unsurprisingly, often feel like a lesser government priority.

What can we expect?

Rumours as to what this year’s Autumn Statement will bring include some hopeful speculation on how small businesses may benefit come Wednesday’s big reveal, which is promising for freelancers operating as a limited company. At Intouch Accounting, we can’t stress enough the independence and financial rewards that come with being limited – but there’s no doubt contracting comes with its own set of limitations.

Contractors and freelancers are, of course, familiar with the financial uncertainty of working on a temporary basis. However, predictions for the 2014 Autumn Statement include support for limited companies and contractors, promising greater financial stability and a brighter future for the country’s independent contractors.

Stimulating investment into new businesses – as well as introducing export tax credits to support the exploration of new markets – looks to be on this year’s economic agenda. Last year’s Autumn Statement brought some welcome changes – not least the extension of Small Business Rate Relief – and this year, we’re looking for ongoing government support for temporary workers operating as limited companies.

Automatic late payment charges, for example, would offer contractors a financial safety net in times of untimely payment, while the adoption of an e-invoicing system across the public sector could streamline and secure payment procedures for the future. There’s no telling how Wednesday’s Statement will unfold, but it’s clear that small businesses are very much on the agenda – with contractors set to benefit from the Treasury’s enterprise-oriented legislations.

A reduction on Visa restrictions for skilled independent workers would undoubtedly help to protect the profits of small businesses and allow UK-based companies to attract overseas talent – while National Insurance relief would offer great benefit for small businesses looking to grow quickly and without obstacles.

How can you stay informed?

You can stay up-to-date on Autumn Statement updates by following the HM Treasury on Twitter, or searching the hashtag #AS2014. Better yet, find all the information you need on this important economical event via the Tax Faculty, who’ll be offering a constant feed of updates and insights throughout and following the Autumn Statement.

In addition to posting their immediate (and informed) reactions to the 2014 Autumn Statement on their site, the Tax Faculty will be offering a series of professional responses so you can stay in the loop. These include broadcasting highlights and offering a wealth of expert insights via Twitter, publishing a holistic overview of the Statement the following day, and recording exclusive podcasts over Thursday 4th and Friday 5th December. That way, you can make sure you don’t miss a trick – and guarantee that you know exactly what this year’s Autumn Statement means for you.

Don’t forget to check out our  blog on December 3rd when we’ll be offering a full review of the Autumn Statement – analysing the legislations that affect you, and looking at what the UK’s contractor population can expect in our economic future.

Need more information? The expert contractor accountants at Intouch Accounting have a wealth of financial knowledge, keeping all of your boxes checked and offering professional support when you need it most – get in touch to find out more.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.