George the Builder!
Autumn Statement 2015
Were you panicking before yesterday’s Autumn Statement? Are you a contractor still trying to work out if little news is good news? We’ve scoured the official documents and applied our vast experience in the contractor market to unpick what yesterday’s speech means for you – and we’re pleased that what transpired was far less than was feared. So what did we actually learn from the Chancellor?
At 12:30 we, along with the rest of the contractor community, waited with baited breath to see what George Osborne had up his sleeve. He issued his Autumn Statement amongst a background of rumour and sanctioned leaks concerning changes to both Travel and Subsistence (T&S) and IR35. Whilst we know change is on it’s way, we got very little further clarity. By the time we had finished our sandwiches, the uncertainty that had dogged the industry had passed. We’ve analysed what we already know and our experience of how these things work to predict how we think IR35 and T&S will progress – you can read more about this in our Autumn Statement summary.
George the saviour?
Yesterday’s speech was made up of an Autumn Statement and a Spending Review – among many rabbits Osborne pulled out of his hat we saw a U-turn in tax credits, protecting the police budget, half a trillion pounds being pumped into the NHS, investment in infrastructure…and a resounding silence in contractor specific issues such as IR35. In the weeks leading up to yesterday, there had been unprecedented speculation in the media and among the contractor community about what was expected to be a huge blow to Umbrella and personal service company (PSC) workers. Instead, what we heard was a loud sigh of relief from much of the temporary workforce.
Beyond the speech
We have long realised that it is not the speech that is the issue but the detailed documentation released afterwards. There were a vast number of publications and announcements that followed the Chancellor’s speech containing much greater detail to what was said.
On page 116 of the Blue Book you will find clause 3.20: a single, short paragraph of text setting out the decision on T&S for intermediaries – but once again this confirms that nothing has been confirmed!
Our Autumn Statement summary looks at the facts emerging from yesterday. But we know you’ll be most interested in making sense of possible future changes. So we’ve applied our years of experience and industry expertise to analyse what’s happening with IR35 and T&S, the role of supervision, direction and control (SDC) and our best prediction of where they are heading. Download it now.
Osborne: friend or foe?
Perhaps yesterday’s shock shows that the Chancellor has bigger fish to fry and he’s putting his energies in tackling the issues that he can actually sort to achieve a positive impact on our economy. It seems that, in the great scheme of things, IR35 (whilst dear to our hearts) comes below tax credits, working families, education, health, policing and security, affordable housing and the living wage. Osborne showed his commitment to protecting what people care about – defence, policing, healthcare – and in doing so may have actually paved the way for contractors who work in these industries. Finding £27bn down the back of the sofa will have no doubt helped!
UK plc cannot operate optimally without a flexible workforce and it’s reassuring to see that this government seem to have woken up to the harm they could cause by implementing ill-thought through changes.
What became clear yesterday is what was already feared by Umbrellas and if you’re contracting through one at the moment, you’re likely to have just lost your T&S expenses and it’s a good idea to consider your options. If you’re committed to contracting and want to continue enjoying the flexibility and maximise your take home pay, let us help you navigate your choices.
The next key date in the contractor diary is 9 December – the day when we’ll find out more about proposed legislation. Then we can more accurately assess the future landscape and plan the way forward for you. Rest assured, knowing we’re on hand to provide the clarity you need around announcements affecting UK contractors. Our clients know they can rely on us to make sense of any changes so they can focus on the job in hand.
We’re committed to contractors and work with over 2,000 every day. As an Intouch client you’ll get the best expert accountancy you need translated in a way you’ll understand. We’d love to tell you more – contact us today.
Does the Autumn Statement show Osborne as a friend to legitimate contractors, or a wolf ready to pounce when emotion recedes? Let us know your thoughts.
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.