The waiting is over, and we finally have the detail of the Autumn Budget 2017. The main issues for contractors and freelancers, and small business generally were addressed as follows:
IR35 in the private sector
Change to the IR35 rules in the private sector, mirroring those implemented in the public sector, were widely expected. IPSE and the FCSA to whom we are affiliated, and others lobbied Government repeatedly not to rush any roll-out of the rules. We’re pleased to confirm that instead of a ‘copy and paste’ job in the private sector, Government has agreed to consult on the changes, and the consultation will be carried out in 2018. We therefore expect no change to these rules in April 2018.
VAT registration threshold
There was talk of the VAT threshold being reduced, which would have a significant impact to those working for clients who could not reclaim VAT – for example private individuals (most of whom are not VAT registered of course), or the NHS. The impact would have been to increase the effective prices charged in this situation. The threshold has not been reduced after all, and has been frozen for the next two years.
There are small increases to the income tax personal allowance and higher rate tax threshold. The expected reduction in the ‘tax free’ dividend allowance from £5,000 currently to £2,000 will go ahead in April 18 as expected. The Taylor Review, which looked at the wider issues faced by modern ways of working (platforms like Uber, deliveroo) and zero hours contracts will be considered further by various Government departments.
The newspapers will probably lead on the effective abolition of stamp duty for first time buyers on purchases of up to £300k, and in expensive property areas, the same discount (up to £300k) on properties up to £500k. This discount is worth up to £5,000 to a first time buyer. Beware though, if anyone purchasing (so one half of a couple for example) has owned a property in any way before, even by inheritance, they won’t get the relief. The big question is, will this cause a similar uplift in property asking prices?
On spending there was more money for the NHS, housebuilding, and other priorities including electric cars. As ever, there will be the usual arguments about how many years this spending is spread over, and if it is all new money. Perhaps the public will gradually be more and more capable of deciding for themselves in future – there was also a commitment to spending to improve the quality of teaching in mathematics.
We’ll send out more detail later this week.