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Budget Update: What can contractors expect?

Budget Update: What can contractors expect?

At the Conservative Party Conference in Birmingham, Philip Hammond stated: “The Conservative Party is, and always will be, the party of business”. Looking ahead to next week’s budget announcement, this assertion could be put to the test. In June Theresa May pledged £20 billion in additional funding for the NHS by 2023. Earlier this month she also promised that there would be a freeze on fuel duty. The chancellor has been placed under pressure to raise taxes in order to accommodate the financial costs incurred by these decisions.

The government are eager to introduce the revised off-payroll working rules into the private sector following its implementation in the public sector. They believe that by 2023 non-compliance could cost HMRC £1.2bn a year. However, the Freelancer & Contractor Services Association (FCSA) have refuted these claims, noting that there is strong evidence of the forecasts being overstated. The FCSA have further highlighted that HMRC is incorrect in its assumptions that one-third of people working through Personal Service Companies in the private sector are actually employees. The FCSA’s Chief Executive is among many industry commentators who believe that “the 2017 reforms have been a shambles” and that it is not realistic to introduce them into the private sector in their current form.

Leading organisations including the Recruitment and Employment Confederation (REC) and the Institute of Chartered Accountants in England and Wales (ICAEW) have also spoken out against the proposed reforms. Both groups are in agreement that the changes would not be ready to roll out to the private sector until April 2020 at the earliest. This would allow time to resolve some of the issues that have arisen in the public sector implementation. With the budget announcement on October 29th, it is hoped that the Chancellor will heed this advice and not make a rushed introduction of the reforms into the private sector.

Find out more about the Autumn Budget from Contracting Scout

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