As the Autumn Budget draws closer, many are beginning to speculate what the announcement may contain. This year’s Budget is of particular importance as it will mark the final announcement before the UK leaves the European Union next March.
With a number of topics expected to be covered in the Budget, from the NHS to pensions, fuel duty to tax rises, Chancellor Philip Hammond will find himself under a significant amount of scrutiny come the 29th October.
For contractors and agencies, the Budget could also see the announcement of the controversial IR35 reforms for the private sector, which will greatly impact the contracting sector should it be introduced.
What are the IR35 reforms?
Reforms to IR35 for the public sector came into force in April 2017, and saw the responsibility for determining a contractor’s IR35 status move from the contractor themselves to the end client or agency.
Unfortunately, some agencies and end clients struggled to incorporate new processes into their business to accurately determine each individual status, and now, nearly two years following its introduction, a number of businesses and organisations are facing tribunals by contractors or investigations by HMRC.
Should these private sector reforms be announced in the Budget, they could be introduced as early as April 2019, and therefore it is essential that businesses ensure they are adequately prepared for the impact it will have on their business.
What else may be covered?
Topics regularly covered in the budget that will directly impact the contracting and recruitment community include national minimum and living wage and income tax allowance, both of which have been increased within the budget for the past few years. Should this rise once again it will mean more income for contractors on lower hourly rates.
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