Beware last minute tax changes from March budget

Beware last minute tax changes from March budget

4 December 2015

Beware last minute tax changes from March budget

With the ink barely dry on the Autumn Statement, chancellor George Osborne has announced that his 2016 Budget will take place in less than four months’ time on the 16th of March.

Importantly, this date is just before the new April tax year, which opens up the possibility that the Chancellor could enact some last minute tax changes that could be disadvantageous to contractors.

During a turbulent time for politics both in Britain and around the globe, it pays to have a firm like Umbrella.co.uk looking out for your best interests and ready to provide rapid tax and financial advice in response to fast changing government policies.

It is still early to be laying out specific predictions for the Budget, but traditionally the chancellor’s Budget statement is when the majority of taxation announcements are made.

Moving forwards, the chancellor is expected to hold his current course and generate a £10bn surplus by the end of the parliament.

At the Autumn Statement the chancellor was able to offer taxpayers a number of concessions because the economic forecasts produced by the independent Office for Budget Responsibility (OBR) were better than expected.

Higher than predicted tax receipts and lower costs associated with serving the national debt allowed the chancellor some freedom to, among other things, cancel his plans for cutting tax credits.

However, if tax receipts go down, or our collective debt becomes more expensive, then we expect the exchequer to try and recoup losses from the taxpayer in March 2016.

One possibility open to the chancellor is the one month contractor cap that didn’t appear in the Autumn Statement, but could still come back to haunt contractors. 

Miles Grady, director at Umbrella.co.uk explained how this could spell danger for contractors.

“Holding the Budget just before the new tax year means that there is a possibility the Chancellor could sneak through tax changes at the very last moment. They say that tax is one of the only certainties in life, and at times of political uncertainty and economic strife, you can be fairly sure that tax bills will rise.

“Four months is a long time for an economy to slip up, especially given certain new global instabilities that are being played out on the world stage. In these situations it pays to have a team of experts behind you, offering advice and, if necessary, helping you set up new financial arrangements to help optimise your tax efficiency.”