Chancellor’s Spring Statement is welcome news for contractors
The Chancellor Philip Hammond’s decision to not add to the tax burden for UK contractors is one to be welcomed.
This is particularly the case after previous Budget announcements increased tax levels and saw a dividend allowance being introduced in 2016, which has led to a contractor’s dividend income above the £5,000 threshold being taxed.
From April 2018, the dividend threshold will fall to £2,000 so contractors will be paying more in tax.
The Government has also previously changed the IR35 status for the country’s contractors in the public sector, meaning they are no longer able to structure themselves using a limited company. Fortunately, no such plans were announced at this Statement for the extension of IR35 into the private sector.
With the contractor market being a competitive one, any changes to tax and dividend allowances often adversely affects contractor’s income. So, while the Chancellor’s Spring Statement has not undone the previous detrimental changes, it hasn’t made things worse either, so the Spring Statement could be considered to be good news.
Contractor industry urges the Government to appreciate the UK’s contractors and their vital role in the economy
Key industry representative bodies are urging the Government to appreciate that the UK’s growing number of contractors plays a crucial role in our successful economy and should be supported in every way possible.
We are all now looking forward to the Autumn Budget when, hopefully, the Government will have some good news for the country’s contractors and a reassurance that their livelihoods will not be adversely affected by any financial decisions.
From the Chancellor’s Spring Statement, there were a few interesting points announced:
- A consultation to tackle late payments for firms
- Extending tax relief to help the self-employed pay for training
- Improving the UK’s digital connectivity
- Business rates revaluation to be brought forward to 2021.
At ContractingWISE we are proud of the help and support we provide to contractors, and with more people turning to contracting, the coming months will be interesting for everyone as Brexit negotiations continue and the economy continues to grow.
However, the Government needs to appreciate that contractors contribute to the economy and so should be rewarded accordingly.