Things to fear in the coming budget

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Measures that respond to the IR35 changes in the public sector are increasingly expected by advisers to contractors at Autumn Budget 2017. 

So instead of the still widely-feared extension of the changes to the private sector, more and more advisers think the Budget may bed-in the April reforms, or tackle what has emerged since them.

“Offshore loan schemes and other contrived vehicles to artificially enhance contractor take-home pay [have sprung up] in the last six months,” said Brookson, an accountancy firm.

So potentially expect action to amend legislation to stamp out tax avoidance schemes.

But the firm cautioned that when similar revisionist approaches have been taken by chancellors in the past, it has adversely impacted genuinely self-employed contractors.

 “[For contractors] Autumn Budget 2017…isn’t just [going to be about] IR35,” says Shaun Critchley, managing director of ADVANCE, another specialist on contractor taxation.

“Chatter over the past week…has been about a ‘bold,’ radical Budget. Here’s hoping that this doesn’t translate into a series of ill-thought out, damaging anti-contractor measures.”

Outside the contracting space, the chatter in Whitehall is that Philip Hammond got into trouble for his aides briefing to journalists that big ideas will be best on November 22nd.

An exasperated “ally of the prime minister” Theresa May told yesterday’s Times: “What were they thinking? When do you ever play up the significance of a Budget like that?”

But an accounting body sounds more than ready for Mr Hammond to ‘go radical,’ given the “heavy burden” that it says is being stored up for the next generation. The ICAEW explained:

“Autumn Budget will give the chancellor an opportunity to build real momentum to bring public sector finances back into the black and this should be grabbed with both hands.”

For contractors however, “the disappointing truth is that the best [they] can realistically wish for is an indirect benefit from [the Budget’s] wider pro-business measures,” Critchley says.

As “the voice of business,” the CBI has told Mr Hammond that his statement he needs to show the government to be working with firms to “shore-up business confidence”.

Included on its Budget wishlist and relevant to contractors, the CBI wants HMRC to be more “open for business” (to businesses), and wants a Brexit hotline, for all traders’ queries on leaving the EU.

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