Spring Budget 2017

[Waldorf]

This has been reported in The Times today:

"Philip Hammond is likely to announce plans to overhaul the tax system for the self‑employed in next week’s budget.

The Treasury believes there is a strong case to tackle the growing disparity between workers who pay tax using PAYE, the self-employed and those who operate personal service companies.

The chancellor is expected to say that there will be changes to self-employed taxation in the autumn budget and is likely to announce a consultation.

Mr Hammond could also reveal some immediate changes to self-employment rules, although Whitehall sources said that this issue had not been settled."

So, as hinted in the Autumn Statement, there does seem to be a crack down looming for the contractor sector. The article hints that legislation would take effect from April 2018, after a period of consultation.

As I have commented before, this has the potential to have much greater impact on the contracting world than the withdrawal of Flat Rate VAT!

[eek]

As I have commented before, this has the potential to have much greater impact on the contracting world than the withdrawal of Flat Rate VAT!

The flat rate VAT really doesn't impact your average contractor. It's a change in setting on Free Agent for most of us....

But yep self employment tax changes are coming and will impact us - like always the devil is in the detail...

[jamesbrown]

This has been reported in The Times today:

"Philip Hammond is likely to announce plans to overhaul the tax system for the self‑employed in next week’s budget.

The Treasury believes there is a strong case to tackle the growing disparity between workers who pay tax using PAYE, the self-employed and those who operate personal service companies.

The chancellor is expected to say that there will be changes to self-employed taxation in the autumn budget and is likely to announce a consultation.

Mr Hammond could also reveal some immediate changes to self-employment rules, although Whitehall sources said that this issue had not been settled."

So, as hinted in the Autumn Statement, there does seem to be a crack down looming for the contractor sector. The article hints that legislation would take effect from April 2018, after a period of consultation.

As I have commented before, this has the potential to have much greater impact on the contracting world than the withdrawal of Flat Rate VAT!

Yes, no surprises here. This was quite clearly telegraphed in the AS last year. As eek suggests, it really depends on the details, because they've also talked about PSCs being legitimate (just not the tax advantage) and about maintaining flexibility in the workforce. Depending on what they do, it could have major implications for the economy as a whole, so it's going to need some care.

[CDJ]

This shouldn't really be a surprise to anyone.. the Government and the Treasury essentially have seen contractors as blanket tax avoiders for a number of years now.. despite what the real world tells them..

I doubt there will be a similar change to what we've seen in the Public Sector contract world (which continues to steamroll into a massive clusterf*ck), but it would be a safe bet that there'll be something that makes private sector contracts equally punitive.. the easiest solution would be to add another 5-10% on the divi tax (although he might get into trouble there from the grey vote) which would make contracting pretty much uneconomic for most of us (well compared to a similarly graded Perm role)..

Still.. there's what gets announced and there's what actually gets enacted... so I guess will have to see what happens..

[Patrick@Intouch]

Changing the flat rate VAT percentage applied may only be a change of settings but it is the effect on net turnover which is more relevant.

For a contractor with a net turnover of £100,000 and a flat rate of 14.5% their company would see a net increase to turnover after corporation tax of £2,080 (£2,106 for full periods after 1 April when CT reduces to 19%) as a direct result of using the FRS. Most of these would have limited input taxes and their true net "gain" from using the FRS may be around £1,900.

If the new "low cost trader" rules apply to them then they could expect almost all of that increase to be lost.

While not a massive impact, this is still an impact nonetheless.

It does, however pale into insignificance when compared to the looming disaster that is the new public sector off payroll worker rules.

[jamesbrown]

It does, however pale into insignificance when compared to the looming disaster that is the new public sector off payroll worker rules.

Which, no doubt, again pales into insignificance when compared to the next iteration of gov't plans to hammer independent professionals.

[MrWebDev]

This doesn't surprise me at all. I've had a bad feeling for a while now regarding a 'crackdown' on contracting coming, I suspect most of this is in relation to the large amount of press the likes of Uber, Deliveroo and the couriers have been getting. I've a bad feeling we're going to get caught up in the legislation that's going to be created/amended to 'help protect' these lower skill workers.

[jamesbrown]

This doesn't surprise me at all. I've had a bad feeling for a while now regarding a 'crackdown' on contracting coming, I suspect most of this is in relation to the large amount of press the likes of Uber, Deliveroo and the couriers have been getting. I've a bad feeling we're going to get caught up in the legislation that's going to be created/amended to 'help protect' these lower skill workers.

Nah, make no mistake, this isn't simply (or even primarily) about low-skilled workers. Take a look at recent reports from the Resolution Foundation and the IFS, which basically say the opposite. We're squarely in the frame too.

[barrydidit]

blanket tax

Shhhhh. Don't give them ideas.

[northernladuk]

This doesn't surprise me at all. I've had a bad feeling for a while now regarding a 'crackdown' on contracting coming, I suspect most of this is in relation to the large number of tosspot disguised permies sitting around me. I've a bad feeling we're going to get caught up in the legislation that's going to be created/amended to 'help protect' these lower skill workers.

FTFY