However, there was a muted sigh of relief within the freelancer sector that there were no obvious additional tax rises coming their way - but that was also tempered by no simplification of the tax regime or reductions in payments.
Although the Chancellor was full of self-congratulatory praise for entrepreneurs, to use words from bygone days - his fine words were buttering no parsnips on a freelancer's dining table.
Qdos - 'Unconvincing rhetoric'
Seb Maley from Qdos said: “There are two ways to view this Budget. On one hand, it’s a relief there are no major tax changes affecting the self-employed. On the other, many will feel the damage has already been done.
“The recently announced social care levy, corporation tax changes in 2023 and IR35 reform have and will hit freelancers, contractors and small business owners hardest. And the cut to business rates, while welcome, won’t be felt by those who work remotely and don’t want or need premises.
“In his speech, the Chancellor was self-congratulatory about the Government’s treatment of entrepreneurs. This is now a tired out, unconvincing rhetoric and one that’s falling on deaf ears.
“Sparing the self-employed in this Budget speech doesn’t paper over the cracks. These workers are bearing the brunt of short-sighted, quick-fix tax reforms that endanger this vital cog of the economy, rather than support it.”
IPSE - 'Disappointing'
Self-employment group, IPSE, felt that the Budget did nothing to help the self-employed and freelance sector who are still suffering from gaps in Covid support and the new IR35 regulations.
Derek Cribb from IPSE said: “After the severe and disproportionate financial impact of the pandemic on the self-employed sector, this Budget provided an opportunity for the Chancellor to show his support for those who work for themselves. While the commitments he made on investment in infrastructure, innovation and skills, are welcome, there is far too little in the Budget that would directly support the self-employed.
“We are grateful there were no new tax rises, but disappointed the Chancellor didn’t take the opportunity to further simplify and reduce working taxes. Instead, we had a promise that tax would come down by the end of the Parliament but no indication of exactly how.
“IPSE has also called for investment in training and skills but the announcement, though welcome, does not go far enough. The funding should be made more flexible so the self-employed can choose which training is right for their businesses.
“Overall, this Budget does nothing to reassure the UK’s 4.3 million self-employed businesses, who are reeling from a series of setbacks, from gaps in support to disastrous IR35 reforms."
Parasol - 'Overlooked'
Umbrella group, Parasol Group, welcomed an earlier move by the Government to improve the regulations for umbrella companies, but saw the Budget as a missed opportunity to progress this.
Clarke Bowles from Parasol Group said: “Although perhaps not unexpected, it’s disappointing that the UK’s contractors have been largely overlooked again in this year’s Autumn Budget. It was widely predicted that the Budget announcements would largely focus on ‘balancing the books’ with a number of tactical moves to recoup debts incurred by the COVID19 pandemic, and that’s exactly what we have seen.
“One announcement that went slightly under the radar from the Government actually came earlier this month with a 1,300-word document titled “Check how to reduce your risk of using an umbrella company who operates a tax avoidance scheme”.
“Although this is certainly a step in the right direction for contractors looking to work for compliant umbrellas, releasing the document ahead of The Budget simply underlines the need for the Government to do more to prioritise the contractor community. We’d hoped to see further talks around improved regulation for umbrellas, but it seems that this isn’t on the Government’s priority list at the moment.
“Other, more significant changes around tax increases were announced much earlier, with the new Health and Social Care Levy impacting umbrella company employees directly, with a 1.25 per cent rise in employee National Insurance Contributions from April 2022.
“The freeze on the personal tax allowance at the current rate of £12,570 pounds until April 2026 continues to be in place as part of the efforts to rebalance the books, but the impact of this alongside a tax increase and rising inflation is that take home pay is being squeezed in real terms for umbrella workers in the same way as it is for full time employees.”
Budget news 2021
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Further IR35 information
For more information about all aspects of IR35, including the controversial IR35 reforms see Shout99's News on IR35 section.
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Susie Hughes © Shout99 2021