Chancellor Philip Hammond chose the Autumn Budget 2018 to announce that IR35 public sector reform will be extended to the private sector.
Other points set to have an affect on contractors and freelancers include an increase to the personal allowance, a new digital services tax, a freeze in fuel duty for the ninth year in a row, and a range of other key announcements.
The Chancellor declared that this Budget would “open a new chapter in our country’s economic future.”
Commentators have noted that Hammond didn’t produce many rabbits out of the hat. But the headline announcement for the self-employed is that public sector IR35 reform will be extended to the private sector – although not until 2020.
The Chancellor’s announcement follows an HMRC consultation on IR35 reform over the summer.
Critics of HMRC’s plans for IR35 reform have consistently said that the full impact of public sector changes can’t be known until 2019.
And while a delay will be broadly welcomed, there are still concerns surrounding its implementation – especially considering there will be different rules depending on the organisation’s size.
Your personal allowance is how much you can earn each year before you start paying tax. It increased to £11,850 in April 2018, and from April 2019 it rises once again to £12,500. The Daily Mirror says that this should give you £130 more a year.
The threshold for the higher rate of income tax (40 per cent) will also increase to £50,000 in April 2019. This means one million people will stop paying the higher rate, according to the Treasury.
The Chancellor used the Budget to announce a raid on big technology companies, starting from April 2020.
The annual investment allowance is also set to increase to £1 million from £200,000 for two years.
Plus, the use of the Private Finance Initiative (a type of public-private partnership where private firms are contracted to complete public projects) will be abolished in the future.
The Chancellor referred to the ‘end of austerity’ throughout his speech, and made the following additional announcements affecting contractors and freelancers.
It was a relatively low-key Budget, with the Chancellor saving his announcement on the personal allowance increase till last.
But the biggest announcement for self-employed contractors and freelancers is on IR35 reform. With the Treasury still to consult on the detailed operation of the reform, you can expect much more news on this over the coming months.
What do you think of the Budget announcements? Let us know in the comments below.
With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it's public liability insurance, professional indemnity or whatever else you need, we'll run you a quick quote online, and let you decide if we're a good fit.Start your quote
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
22 June 2020 • 9-minute read
How to start a clothing business. It can be an all-consuming process but with that first sample run and customer sale comes great…
6th Floor99 Gresham StreetLondonEC2V 7NG
Sol House29 St Katherine's StreetNorthamptonNN1 2QZ
© Copyright 2021 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.