Autumn Statement at a glance.

Words by hubbul

In the Autumn Statement, The Chancellor laid out his plans for the Government’s future spending. So let’s get to it. Here’s what matters to freelancers and contractors across the UK.

For starters, IR35 remains, and remains the same – for the time being anyway. Rumours have been doing the rounds that rules around IR35 were to be changed, with contractors automatically going onto the payroll of clients after just one month.

It would be a move that many believe will harm the UK’s contractor workforce, limiting the freedom, flexibility and in general independent nature of this thriving workforce.

On the news that there are to be no changes to IR35 just yet, APSCo’s Samantha Hurley said:

“It seems that the Government has listened to our concerns about damaging the professional, flexible labour market in the UK with a knee-jerk reaction. We will continue to work with the Government to find the best solution for the Exchequer and British business.”

Of course, the lack of an announcement in the Autumn Statement doesn’t mean that the Government won’t go forward with this proposal in the future, but it does almost certainly mean that it won’t come into effect in April, 2016, which is what we feared.”

But this relief was short lived, as the Autumn Statement revealed that the Government will abolish travel and subsistence expenses for contractors working through umbrella or personal service companies.

This will kick in April 2016 onwards, and Julia Kermode, who heads up FCSA – the trade body for umbrella companies – spoke of her disappointment.

“As usual the devil was in the detail of the Chancellor’s Spending Review today and it would appear that the Government will go ahead with its plans to abolish T&S tax relief from April 2016 for temporary workers engaged through an intermediary. 

This will apply to workers engaged through an umbrella or personal service company where IR35 applies. It seems that those outside of IR35 will not be penalised, although we note that further change on the employment intermediaries legislation will come following Mr Osborne’s statement that he will look into “disguised remuneration” – and we will play an active role influencing such policy discussions.”

The hot topic of housing was high on Osborne’s agenda, as Government pledged to build 400,000 new homes, with 135,000 of those available on the buy-to-let scheme.

"On top of this the Government raised stamp duty by 3% for people using buy-to-let on second homes."

Sat Singh, CEO at Contractor Financials, summed up how this might affect freelancers and contractors.

"Most heavily hit will be contractors and freelancers who own second homes or buy to let properties already. We knew from the April budget that mortgage interest was no longer a tax deductible expense against rental income. The chancellor has gone a step further and made acquisition of further properties for buy to let purposes less attractive by introducing the 3% stamp duty surcharge.” 

When it comes to business in general, The Chancellor extended small business rate relief for another 12 months, announced plans to build 26 ‘Enterprise Zones’ designed to inspire new enterprise, and committed to improving the infrastructure across the North of England. However, a 17% slash to the Department of Business and Innovation doesn’t make for pleasant reading.

Finally, locum doctors and nurses will be feeling positive as the Government promise to spend another £4billion on the NHS. 

"Winners will be those who work as contractors and freelancers in the NHS, as part of the ministry of defence supply chain and in transport infrastructure supply chains. There has been massive investment announced in all of these areas and many contractors will benefit as a result,” explained Sat Singh.

 

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