How Summer Mini Budget Will Affect Contractors
The Chancellor’s £30bn plan to protect jobs and boost the economy in the wake of the coronavirus outbreak doesn’t include everything on contractor’s wishlist, but some of the measures will be welcome.
The ‘mini budget’ includes plans to reward employers that bring back furloughed workers, increase the threshold on stamp duty and cut VAT in some key at-risk sectors.
Before waiting tables in Wagamama stunt, Rishi Sunak also announced a government-funded 50% off meal deal in participating restaurants and laid out plans to boost employment opportunities for young people.
Miles Grady, Director of Umbrella.co.uk, said: “Most contractors probably won’t feel the impact of these measures directly, but the shot in the arm could help many more survive and thrive in the coming months.”
What’s not in the mini budget
The Chancellor’s speech didn’t include any new detail on IR35, but a passage in the government’s written statement confirmed that changes to off-payroll (IR35) working rules in the private sector are still delayed until April 2021.
Many contractors and industry bodies hoped that the reforms, which would see more contractors trapped in ‘inside IR35’ contracts, would be delayed again or even scrapped.
Contractors should now prepare for the changes as if they will be implemented next year. For IR35 information and advice, speak to a member of our team today. Call: 0800 121 6513.
What was in the mini budget
The budge-like statement did include measures that may benefit some contractors.
The Chancellor promised a £1,000 bonus for employers, including limited companies, that bring someone back from furlough and then continuously employ them through to January.
This could apply to any limited company directors that have furloughed themselves but are planning to return to work soon, as long as they are paid at least £520 on average each month from November to the end of January.
Any contractors that are close to buying a house may also be able to take advantage of a stamp duty holiday. Designed to stimulate the property market, this benefit will increase the threshold on stamp duty to £500,000, as long as the property is bought as a ‘main home’.
The Chancellor also announced a £2.1bn kickstart scheme to create more jobs for people aged between 16 and 24. Any contractors that need additional help could benefit from a six-month subsidised work placement if they employ a young person who is currently on Universal Credit.
And contractors in certain industries may be able to benefit from a £3bn ‘green buildings’ scheme, which includes measures to improve energy efficiency in public buildings and a scheme to decarbonise social housing with measures like insulation and heat pumps.
Like the rest of the population contractors may also benefit from lower VAT on hospitality, accommodation and attractions. The ‘eat out to help out’ scheme that will also provide 50% off restaurant meals on Mondays, Tuesdays and Wednesdays in participating restaurants.
For more information visit www.umbrella.co.uk or call 01625 546 610.