Sometimes the Autumn Statement can be a rather dull affair. Minor tweaks and a relative side show compared with the main Budget. Not this year however, what with a new Prime Minister, Chancellor, looming Brexit and sweeping nationalism the stakes have been raised.
For the 1.4million contractors, freelancers and self-employed professionals in the UK, however it is less sweeping ideology and more small but important changes they wish to see made. Independent workers want to see less red tape, more legislative clarity and tax changes which will benefit those working via a PSC or umbrella company
IR35 Public Sector Reform
Limited company contractors tend to hope that the reforms to IR35 are going to be shelved indefinitely or at least delayed, and after so much uncertainty many PSCs will want to see a decision either way come Wednesday. Should the reforms be implemented from April 2017, the least contractors deserve is properly thought-through changes to ensure those of them working in the public sector who are outside IR35 are not unfairly penalised.
Confirmed investments in crucial infrastructure projects like housing, road and rail are desirable for contractors across a range of industries. It would be a boon for independent professionals who work in these sectors and for many more freelance consultants who have to travel frequently as part of their work.
In a speech at the Tory party conference in Birmingham in October, chancellor Hammond hinted that numerous minor investments would indeed be a major cornerstone of his strategy saying: “Our stock of public infrastructure – like our roads, railways and flood defences – languishes near the bottom of the developed-countries’ league table after decades of under-investment.”
The flexible workforce wants Autumn Statement 2016 to announce new initiatives within the digital sector, as these will consolidate demand for contractors and freelancers. Their expertise and flexibility is vital any time the government wants to deliver digital and project-based work. In the last Budget, the then-chancellor George Osborne announced two £1,000 tax breaks for the ‘gig economy’ related to trading and renting property; his successor would do well to build on these.
Get Britain Building
A commitment from the government to ‘get Britain building’ included enough affordable homes each year to support families on low incomes. This will also offer a further boost to the construction sector – home to many contractors, and would help take the government a significant way to its target of building one million homes by 2020, delivering 80,000 homes each year in England. In their personal lives too, contractors are unlikely to shy away from more housing stock, whether they’re eying their first-rung on the property ladder or a new addition to their buy-to-let portfolio.
As the UK prepares to leave the EU, British businesses need some reassurances that we will do so in a way that protects the British economy; and the chancellor’s statement on Wednesday is a high-profile platform to provide them.
The future of the UK’s trade is currently up in the air with businesses of all sizes across the country waiting to hear some direction. There is also uncertainty around European funding for both local and national projects. The chancellor has a chance to clear all this up.
Cutting corporation tax goes a long way to supporting small businesses, but Mr Hammond has already indicated that he won’t cut corporation tax to 15% to boost the economy following Brexit – as the previous chancellor, George Osborne, had pledged. Unfortunately for contractors, Hammond has reportedly told European finance ministers that he is sticking to a previous plan to cut the rate to 17% by 2020; but a tax cut is still on most contractors’ wishlists.
We will have to wait for Wednesday to see exactly what Mr Hammond rolls out, but there is hope that with so much uncertainty now is the time to do something to ensure stability and flexibility for the substantial number of contractor who make up an indispensable part of our economy.