Of particular interest will be any changes to IR35 in relation to the new rules being imposed on office holders or people who are integral to the running of an organisation. (See: First legal change to IR35 stengthens its provisions Shout99, Dec 2012).
Here contractor specialists, Qdos, gives their views on what could be in the Chancellor’s red box on Wednesday...
We would expect some guidance on office holders to be announced at Budget especially when a departmental spokeswoman recently said that HMRC plans to publish further guidance shortly on the change to IR35 explaining exactly what it means and providing clarity about when it will apply.
This is essential as without such the current judicial definition will be open to interpretation and will only confuse the issue rather than bring certainty to contractors, as HMRC pledged to achieve last year. Freelancer group, the PCG want the Chancellor to clarify what roles would and would not be considered office holders. I am not sure whether or not HMRC can or are even inclined to produce an exhaustive list but some examples contained in any guidance would be helpful.
The PCG has written to George Osborne urging him to use the Budget to clarify guidance for off-payroll workers. This is much needed considering the ignorance and bloody mindedness being displayed by a number of public bodies.
One letter recently sent to a contractor by the head of HR at a Government agency assumed that the contractor was within the scope of IR35 and asked for evidence “relating to this type of engagement” so the agency could assure itself that the tax and NIC obligations of its “off payroll staff” are being met. We have witnessed a similar attitude demonstrated by other Government agencies.
The Chancellor announced in his Autumn Statement that the main rate of CT will decrease to 21 per cent by April 2014. There has also been speculation that there will eventually be one rate of CT and it maybe that the Budget will announce the date this is to happen.
The personal allowance has already been increased to £9440 for 2013/14. The Coalition has previously stated that they would like the personal allowance increased to £10,000 before 2015. Any further changes announced at Budget however are likely to favour employees on lower incomes.
Full coverage and expert analysis on the Budget issues affecting contractors will be available in the Political News section of Shout99. The Budget will take place on Wednesday March 20.
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Susie Hughes © Shout99 2013