With 2019 well underway, contractors across the UK are planning their year ahead, to ensure that their contracting career thrives over the coming months. With a number of significant changes on the horizon for the UK as a whole, as well as those specific to the contracting community, we are exploring what these changes will mean for contractors over the next year.
As one of the most anticipated events in the 2019 calendar, when the UK is set to exit the EU on 29th March, it will impact a significant majority of people, particularly those in the contracting industry.
With details on an exact Brexit deal still undecided it is mere speculation as to how exactly contractors will be impacted. However, it is expected that contractors travelling to the UK from EU nations, and UK contractors travelling to EU destinations to work will be impacted following the removal of ‘freedom of movement’, however this is unlikely to occur until the transition period ends on 31st December 2020.
Preparation for IR35 reforms
2018 was a year of anticipation for the business world, as we awaited the government’s decision on the extension of IR35 reforms into the private sector. Officially announced in the Autumn Budget, reforms will come into force from April 2020, at which time the responsibility for determining IR35 status will move from contractor to end client or agency for medium to large businesses.
Many end clients and agencies are likely to begin the transition over to this process in preparation for the reforms coming into force. Therefore, contractors should also refresh their knowledge on IR35 legislation, to ensure that they understand the entire process, as well as what to do if they disagree with their status decision.
Living wage and tax changes
Once again, the Autumn Budget announced an increase in the National Living Wage, as well as a rise in the tax-free allowance threshold. Both mean that umbrella contractors currently operating on lower hourly rates will see an increase in their monthly income. The National Living Wage will rise from £7.83 to £8.21, while the tax-free personal allowance threshold will increase to £12,500 from April 2019.
Here at Sterling, our expert team is supporting contractors across the UK to ensure their contracting careers prosper in 2019. Contact us today to find out more about how we can support you.