Budget 2017 (4): Budget twists the knife into freelancers and contractors

by Susie Hughes at 22:14 08/03/17 (Political News)

Contractor tax advisor, Qdos Contractor, has responded to the Budget with concern, as the Chancellor, unveiled the Government’s plans to build ‘an economy that works for everyone’, but seemingly not those working for themselves.

Ignoring pressure to delay imminent public sector IR35 changes, Philip Hammond unveiled the Government’s new tax plans, the majority of which are at the expense of the UK’s 5million self-employed. Class 4 NICs raised from nine to 10 per cent from April 2018, with further one per cent increase in 2019. Tax-free dividend allowance to drop from £5000 to £2000 in April 2018. Seb Maley, Qdos Contractor CEO said: “Regardless of what the Chancellor says, the self-employed don’t enjoy the same kind of benefits or workers’ rights as employees. To raise Class 4 National Insurance, and slash the tax-free dividend allowance from £5,000 to £2,000, reduces the benefits of working independently.” IR35 Any last-ditch hopes that the Chancellor might delay the incoming IR35 public sector changes were dashed and will go-ahead in April 2017 as planned despite pressure to delay or reconsider. Advertisement Seb Maley said: “IR35 wasn’t mentioned in The Budget. That the Chancellor chose to ignore the calls to delay April 6’s changes to IR35 in the public sector isn’t a surprise though. "Given the genuine concern over the effectiveness and accuracy of HMRC’s new IR35 tool however, there’s very little time or room for mistakes when setting public sector contractor’s IR35 status - which is concerning.” Businesses below VAT threshold of £83,000 to be given one more year to prepare for digital quarterly tax returns. Budget links on Shout99 Budget (6): Small business owners to feel the pinch Budget 2017 (5): Accountants reaction to small business tax clampdown Budget 2017 (4): Budget twists the knife into freelancers and contractors Budget 2017 (3): Continued pressure on small firms and self-employed Budget 2017 (2): Self-employed hit hardest by Budget tax rises Budget 2017 (1): 'Unfairness' of tax system which favours self-employed Seb Maley said: “Giving many businesses the extra time they might need to prepare for quarterly tax returns is a positive move. That said, it isn’t enough to take the edge off a concerning budget for the UK’s self-employed.” 'Short-sighted and contradictory Commenting on the Budget overall, Seb Maley said: “The Chancellor promised that to build a ‘country that works for everyone’. But from a freelancer, contractor or small business perspective, there’s little to be upbeat about. “Freelancers and contractors work without employee benefits such as holiday and sick pay and company pensions. Raising taxes for the self-employed at such an uncertain time for contractors – particularly for those working in the public sector – seems shortsighted and contradictory. “Independent workers are the engine room of the economy - contributing £119bn to the UK in 2016. To continue to do so, they need to be given every opportunity to thrive and prosper, not burdened with higher taxes for taking the risk to go it alone.” Further information Shout99 will continue coverage of the stories emerging from the Budget; in the announcements after the Budget; and expert comment and analysis in the Political News section of Shout99. Alerts also available through our Twitter feed. Tweet -- If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'. - Susie Hughes © Shout99 2017

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