July’s Budget – what’s in it for contractors?
With tomorrow’s Budget just hours away, what’s in the red briefcase for UK contractors? It’s George Osborne’s first solo Budget, so it’s only natural to wonder what effect both the Budget and the recent general election will have on the UK’s contractor landscape.
An impending UK Budget is always an uncertain time, especially when the self-employed are likely to be affected. Whilst all of us dream of policies that will make our lives easier, some contractors simply want a fairer way of working, helping them to reach their contracting potential. Here’s a few things we’d like to see tomorrow that would help the UK contractor market:
- Clarity surrounding the reimbursement of business expenses post March 2015
- Clear decisions on the proposed changes to travel and subsistence rules
- Clear decisions and commitment to the simplification of the tax system
- Clarity about Government’s long-term intentions regarding IR35
- Greater support for small businesses, especially contractor companies, to get the right start
- Exemption for small companies from tax reporting so small businesses don’t suffer under big business rules
- Quarterly RTI submission, to match existing quarterly payments – surely it makes sense to bring the RTI reporting regime in line with the payment regime
- Greater clarity on timescales for digital tax returns
- More childcare support by increasing the threshold for child care vouchers. As child care tax relief has been delayed, it makes sense to use another incentive to make it easier for people to get back to work
- Back to work schemes that encourage all people to get back to different types of work, not just permanent employment. The schemes need to encourage entry to a flexible workforce, including contracting
- Increase personal allowance to £12,000 – why delay?
- Increase the threshold after which a formal members’ liquidation is required, from £25,000 to £50,000 to make it easier to close a company where no other creditors are involved
- HMRC should adopt a fairer basis for penalties and interest, as proposed in their consultation document.
Whilst the above in most cases may remain fantasy, we are hopeful that this Government will be keeping the self-employed’s best interests at heart. To understand exactly who will be fighting the corner for UK contractors we’ve taken a look at some of the MPs, and what their positions are:
Ambassador for self-employment: @davidmorris has been reappointed to provide single focus for the self-employed. With his presence within parliament, the self-employed are empowered with a voice for change and support. David regularly tweets about how he is planning to challenge IR35, with talks last week of the Secretary of State for Business bringing it to the top of parliament’s attention.
Secretary of State for Business: @sajidjavid has been appointed to engage and demonstrate the value of the UK’s self-employed in today’s workplace. Previously Mr Javid has demonstrated a strong emphasis on late payments to contractors, clearly demonstrating that issues which affect contractors are close to his heart.
The Minister for Small Business, Industry and Enterprise: @anna_soubry is tasked with ensuring there’s growth and competitiveness with the UK’s small businesses market. A newly created position within parliament, only demonstrating further the commitment the Tories have towards supporting Limited Company contractors.
So whilst contractors can hope to see positive pledges being made in tomorrow’s Budget, the reality is we don’t quite know. Be sure to look out for our blog for our Budget reaction and whether it’s a positive step for the UK’s contractors.
What would you like to see in tomorrow’s Budget? Let us know what’s on your wish list.
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.