Autumn Statement 2016

[ContractorHardman]

It sounds like they are going to withdraw the expenses claims we submit. As people say, the devil is in the detail.

[Lance]

https://www.gov.uk/government/public...2016-documents

[westtester]

Had a quick scan through and can't see anything specific about IR35. This one caught my eye though.

"The government will introduce a new 16.5% rate from 1 April
2017 for businesses with limited costs, such as many labour-only businesses"

[eek]

Found it

4.11 Off-payroll working rules – Following consultation, the government will reform the offpayroll
working rules in the public sector from April 2017 by moving responsibility for operating
them, and paying the correct tax, to the body paying the worker’s company. The government
believes public sector bodies have a duty to ensure that those who work for them pay the right
amount of tax. This reform will help to tackle the high levels of non-compliance with the current
rules and means that those working in a similar way to employees in the public sector will pay
the same taxes as employees. In response to feedback during the consultation, the 5% tax-free
allowance will be removed for those working in the public sector, reflecting the fact that workers
no longer bear the administrative burden of deciding whether the rules apply. (43)

Exactly what I was told last week.

[jamesbrown]

IR35 changes going ahead as planned, with 5% allowance removed too.

[TheCyclingProgrammer]

Re: FRS VAT:

VAT Flat Rate Scheme – The government will introduce a new 16.5% rate from 1 April 2017 for businesses with limited costs, such as many labour-only businesses. This will help level the playing field, while maintaining the accounting simplification for the small businesses that use the scheme as intended. Guidance which has the force of law, published today, will introduce anti-forestalling provisions. (23)

At best, it will wipe out the profit many of us make from the FRS. At worst it might force a few people off the scheme and onto the standard scheme but it remains to see how this will work in practice.

Quick calculation: if you turnover £100k net and were on a 14.5% FRS rate you would have made an additional £2600 in FRS surplus. On the new rate you'd make £200 - in other words if more VATable expenses are more than 1% of your net turnover you'll need to come off the FRS or it will cost you money.

Lets wait and see what they define as "limited costs" because I'm sure most of us have a higher than 1% expenses to turnover ratio! My admin costs are typically around 5-10% of turnover.

[jamesbrown]

Yes, the VAT FRS and IR35 seem to be the pertinent changes. Nothing else obvious.

[NickFitz]

Any chance of posting links rather than cutting and pasting text, folks? Otherwise it's impossible for us to view the material in context, or indeed know if it's true or some garbage copied from Facebook

On the FRS: Tackling aggressive abuse of the VAT Flat Rate Scheme - technical note.

[MarkT]

Employee business expenses – the government will publish a call for evidence at Budget 2017 on the use of the income tax relief for employees’ business expenses, including those that are not reimbursed by their employer

[MrMarkyMark]

Well, this new 16.5% VAT rate will mean they trouser less from virtually all of the contractors that work in the City Of London where the business's cannot claim back VAT