Spring Budget 2017

[eek]

he won't have to tweak current tax policy too much as a percentage our tax take from personal taxation is historically low compared to our peers, this is why the Swedish comparisons and the like do not stick.

I am hoping that the changes only relate to rolling out the changes in the public sector IR35 status etc that we have in the other thread into the private sector. If he does that, I am not affected anyway.

We've seen elsewhere that one reason why the changes were not implemented across all sectors was due to the pushback that would have occurred if the scheme was deployed to the private sector.

Now I can see the scheme eventually being deployed to the private sector eventually but the important issue here is the Taylor report into employment. The answers to that are going to feed everything going forward so while I can see some equalising bits appearing now (the NIC one is a given, that dividend tax increase as well) I can see bigger changes being foreshadowed but not implemented or even consulted on yet...

As I said earlier with a second budget in the Autumn there is little to actually say at the moment unless you want to either implement it immediately or set things up for later.

[jamesbrown]

As I said earlier with a second budget in the Autumn there is little to actually say at the moment unless you want to either implement it immediately or set things up for later.

I agree, but I expect there will be a separate tax review, announced in the Budget, to run alongside the Taylor Review, for which tax is out of scope (and Taylor is already pushing for this). However, the difficulty is that they're always keen to respond instantly, regardless of what's coming down the track, and the Class 4 NI speculation/briefing is consistent with this. It's hard to imagine that they'd increase the incentive to incorporate via a reduction in C4 NI without addressing incorporation, and dividend tax seems to fit better here than a rollout of the PS rules to the private sector....then again, nothing from HMT would really surprise me

[eek]

I agree, but I expect there will be a separate tax review, announced in the Budget, to run alongside the Taylor Review, for which tax is out of scope (and Taylor is already pushing for this). However, the difficulty is that they're always keen to respond instantly, regardless of what's coming down the track, and the Class 4 NI speculation/briefing is consistent with this. It's hard to imagine that they'd increase the incentive to incorporate via a reduction in C4 NI without addressing incorporation, and dividend tax seems to fit better here than a rollout of the PS rules to the private sector....then again, nothing from HMT would really surprise me

Given that Class 4 NI changes would encourage moving to limited companies something to stop them doing so would the best way to cover this. Going to be curious how they do it without annoying savers though....

I do wonder if they will announce it for 2018 or try to implement it immediately...

[jamesbrown]

Given that Class 4 NI changes would encourage moving to limited companies something to stop them doing so would the best way to cover this. Going to be curious how they do it without annoying savers though....

I do wonder if they will announce it for 2018 or try to implement it immediately...

If it's an increase in dividend tax, I think it will be immediate. If it's a rollout of the PS rules, it will definitely need to wait. However, if they have a comprehensive review scheduled, you have to wonder why they'd bother. TBH, I'd be less surprised if they increased the dividend tax, postponed the PS rules, and flagged comprehensive reform for the Autumn Budget. I also read today that some organisations believe there's a basis for legal challenge of the PS rules:

ARC Lawyers Address HMRC | Online tool could lead to 'unlawfulness'. | The Global Recruiter

[PurpleGorilla]

Also considering my options for the future. Are there any locations that look viable purely from a financial perspective (other factors, lifestyle, etc. are more a personal choice)?

London is the place to be, apparently.

Lol.

[Maslins]

I struggle to believe there'll be any last minute change to upcoming PS IR35 changes. They won't want to backtrack because:
1) politically embarrassing,
2) the PS will have already put vast amounts of time and effort into figuring out how the rules will work in practice.

Similarly I can't see them rolling it out to the private sector this soon as they'll want it to be properly tested first. Plus you can imagine the private sector will perhaps be a bit more...errr...resistant/creative.

What frustrates me is because of all the uncertainty and lateness of this tool being introduced, many PS engagers will have had their hands forced into pushing umbrella/PAYE. Whilst the reality is the primary cause will be huge uncertainty for them, you can imagine in a year's time Mr Hammond announcing it a huge success because so many PSCs made that switch and hence tax take increased.

In reality whilst many contractors will huff and puff a lot, I'm not convinced the mass exodus to the private sector/overseas/early retirement will happen. So I personally can't see the PS falling apart due to these rules any more than the news is constantly telling us it already is.

...so yeah, I'm with jamesbrown, if there'll be immediate changes, it'll be "easy" ones like upping dividend tax and class 4 NICs. Possibly also further restrictions on pension contributions.

[MrWebDev]

I struggle to believe there'll be any last minute change to upcoming PS IR35 changes. They won't want to backtrack because:
1) politically embarrassing,
2) the PS will have already put vast amounts of time and effort into figuring out how the rules will work in practice.

Whilst I agree with the first point you make, you are kidding about the second one right? Most public sector bodies from what I've read and been told first hand have no idea what's going on. Look at the shambles at TFL, as far as I know at least some departments at the BBC are still faffing around, these are only two of a number of examples I know of in the last month or so. This tells me that even though this has been known about for around a year or so, with only a month to go the PS is still vastly underprepared.

On another note, the head of REC was on Newsnight last night and had some interesting things to say, you can watch here 14m30s in. A lot of what they talked about was related to the whole Uber, Deliveroo, Courier thing, but some of what he said also applied to contractors like ourselves too.

[Waldorf]

If changes are announced on Wednesday, when are they implemented? Can it be any time or must it be before a new tax year starts?

My guess is that changes will be announced in the Budget combined with the usual consultation period, there will then be legislation announced in the Autumn Budget, effective from April 2018.

Budgets have been in the spring for decades apart from a period when Ken Clarke changed it to November, much better time, however Brown reverted back to Spring when his regime started.

[WordIsBond]

There could be an immediate change to div tax to prevent people jumping ahead of the change, but I'd be surprised. Immediate changes have many drawbacks, and since the rate change is not likely to be more than 2-3%, the gain from pushing it through now rather than on 6 April is likely to be small. Also, the new dividend tax hasn't even been in effect a year. You hit pensioners again and there will be an uproar, especially since their savings interest rates are negligible.

There's also an advantage to preannouncing it. If you announce it before it takes effect, some people will bring dividend payments forward, which will mean a nice little cash boost for the Treasury when those taxes are paid. If the dividends are deferred until mid-April, the Treasury doesn't get the tax on them until much later.

I'll actually be surprised if there is either a higher NI for sole traders or higher dividend tax taking effect before April 2018. They might announce it now, or they might announce a consultation on it now, with it actually being announced in the Autumn. But I doubt it happens either tomorrow or in April.

[MrMarkyMark]

There could be an immediate change to div tax to prevent people jumping ahead of the change, but I'd be surprised. Immediate changes have many drawbacks, and since the rate change is not likely to be more than 2-3%, the gain from pushing it through now rather than on 6 April is likely to be small. Also, the new dividend tax hasn't even been in effect a year. You hit pensioners again and there will be an uproar, especially since their savings interest rates are negligible.

There's also an advantage to preannouncing it. If you announce it before it takes effect, some people will bring dividend payments forward, which will mean a nice little cash boost for the Treasury when those taxes are paid. If the dividends are deferred until mid-April, the Treasury doesn't get the tax on them until much later.

I'll actually be surprised if there is either a higher NI for sole traders or higher dividend tax taking effect before April 2018. They might announce it now, or they might announce a consultation on it now, with it actually being announced in the Autumn. But I doubt it happens either tomorrow or in April.

+1