On Wednesday this week we will see our new chancellor, Philip Hammond, deliver his first Autumn Statement to the Commons. This will be the first non Osborne statement since 2009 so will it signal a new approach?
The contractors & freelancing industry needs a new chancellor with a new approach
George Osborne traditionally delivered a short statement, wrapped up in less than an hour and left the longer, weightier issues to the Budget. Will we see the new chancellor do the same, or will he take this opportunity to introduce himself formally and give us all a deeper insight into how things will be under his jurisdiction?
Our accounting advisors’ expectations & forecast
The Office for Budget Responsibility has delivered its update on the country’s finances on the same day as the Autumn statement since 2010 and this report will give us an idea of the health of the books and predicting the levels of deficits or surpluses the public purse will have over the coming years. It is around this report that a great deal of what the Chancellor will speak about will be based.
As it is his first Autumn Statement we can expect that Mr Hammond will want to do all he can to make an impact, without making promises that can’t be kept, so here’s a few predictions:
- Commitment to reduce Corporation Tax
- More support for the self-employed
- IR35 in the public sector
- Increase of spending on infrastructure
Commitment to reduce Corporation Tax
The Chancellor has indicated that he intends to stick to plans to reduce the rate of Corporation Tax to 17% by 2020. He has however said that plans to slash it to 15% as part of the post-Brexit recovery plan outlined by Mr Osborne were “suggestions”.However as Mr Trump has suggested US rates could be reduced to 15% we might get a surprise.
As contractor accountants, we would always welcome lower rates of Corporation Tax for our clients, especially those who have been adversely affected by the changes to the tax treatment of travel and subsistence expenses.
More support for the self-employed
We have already written about the Deane review into non-standard working practices so we expect that we should hear some of the results of that review announced in the statement. Recent high profile cases such as Uber mean that there is increasing focus on the rights of the self-employed and we can expect more in the future.
IR35 in the public sector
We know that changes to the way IR35 is policed in the public sector will be changing in April, however there have been some suggestions that the Chancellor might need to scrap, or at least water down some of the changes, given that the UK faces “a mass migration of digital contractors”
Increase of spending on infrastructure
It was announced this week that the Government has allocated £1.3billion to spend on Britain’s roads and we can expect further announcements of spending on transport an infrastructure in the statement.
Many infrastructure plans require contractors and if these plans are threatened by the lack of available skills due to the proposed IR35 changes then we could perhaps see IR35 exemptions for certain projects?
We really are only guessing when we try to predict the detail of the statement and the effects that it may have on the UK’s contractor workforce.
Rest assured, we will be watching the Statement closely and will report back on Thursday with our thoughts.
In the meantime, if you are a contractor and need expert advice on how to navigate the tricky legislative waters then please get in touch.