Qdos - Cracks
Tax and insurance specialist Qdos saw beyond the 'headline grabbing' genrous measures in the Budget and expressed concern about the problems facing freelancers.
Seb Maley from Qdos said: “On the face of it, the headline grabbing measures in this Budget seem generous - no immediate increase in Corporation Tax, a freeze on personal tax thresholds and more support for the self-employed will please many people working for themselves, in the short term at least. Dig deeper though and the cracks in this Budget become clear.
“The Chancellor reiterated that he will do ‘whatever it takes’ to support people and businesses. Yet millions of small business owners have been abandoned and left stranded without meaningful financial help for an entire year. The Government must go further - these workers are key to the economic recovery.
“Delaying or, better still, scrapping IR35 reform in the private sector would have been the right thing to do for contractors. But I’m not surprised the changes will definitely go ahead next month - the Government are desperate to roll out reform. My advice to contractors and businesses impacted is to prioritise IR35 compliance immediately. The reform can be managed with the right approach.”
SJD Accountancy - overlooked
Contractor specialist accountants, SJD Accountancy, welcomed the continuation of the support for self-employed, SEISS, and its extension to the newly self-employed, but regretted that freelancers continue to be over-looked.
James Foster from SJD Accountancy said: “It’s great to see the fourth SEISS grant has been kept at 80 per cent particularly considering the ongoing lockdown restrictions that remain, as well as the announcement of a fifth grant.
"It was also welcome news that, providing they have filed their 2019/20 tax return, the newly self-employed will be able to apply for both of these grants, which addresses a population in excess of 600,000 that had previously been excluded from this support. The Government must support our contingent self-employed in the same way is does for employees through the CJRS scheme, which was extended to September, as expected.”
“With this, there needs to be additional flexibility in the coming months. It’s unrealistic to assume the economy will bounce back immediately once lockdown restrictions ease and protecting the livelihoods of individuals must remain a priority for the months, and even years, to come.”
“The ongoing issue of no support for contractors and freelancers working through limited companies continues to be overlooked by the Government. These self-employed workers are ineligible for the SEISS and were originally pointed towards the CJRS but may only be eligible if their business operates a PAYE scheme, while dividends could also not be claimed for. Once again, contractors and freelancers have completely fallen through the cracks and we are fast approaching a full year whereby these workers have been denied much-needed financial assistance.
“Contrary to rumours of personal tax increases, the Government confirmed that income tax, National Insurance and also VAT thresholds will be frozen until 2026. Corporation Tax on the other hand will increase to 23% in 2023, however there will be a Small Profits Rate where businesses with profits of less than £50k will continue to pay the 19%. A taper will be implemented for profits between £50k - £250k, before the full 25 per cent rate is payable.”
Further Budget news
Reactions from experts in the freelancing sector and further details of relevant announcements are summarised in Shout99's Political Section
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Susie Hughes © Shout99 2021