budget Articles

Contractors Pushed Down Insolvency Payout Pecking Order
marketing | 8 November 2018
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Last week , we covered some of the biggest Budget announcements and how they would affect contractors. This included a big change to private sector IR35 rules and other smaller changes to tax and spending.

Buried a little deeper in the Chancellor’s Budget statement, we uncovered one more change that pushes HMRC further up the payment pecking order when a business goes insolvent.

Finance bill confirms travel and subsistence restrictions
marketing | 24 March 2016
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The government has published its Finance Bill, confirming a number of important amendments from the Budget and Autumn Statement.

It contains a number of important details about travel and subsistence (T&S) tax relief for contractors engaged through an employment intermediary, like an umbrella company.

Travel and subsistence

Clause 14 of the bill refers to ‘travel expenses of workers providing services through intermediaries’, detailing important changes to T&S tax relief for contractors engaged through umbrella companies.

The document includes a number of amendments, but none that were unexpected.

In the past, contractors working through umbrella companies have been able to offset ‘reasonable’ expenses like travel and accommodation against their tax bill to increase their take home pay.

The new Finance bill confirms a number of restrictions to this, particularly regarding how the new rules will be applied. 

‘Off-payroll’ public sector tax changes announced

The Chancellor George Osborne has announced significant changes that might affect people working in off-payroll public sector jobs.

The announcement will change the way that IR35 legislation is applied - meaning that public sector organisations and authorities including Whitehall departments, schools, the NHS, police and public sector broadcasters like the BBC and Channel 4 - will be responsible for interpreting and enforcing the rules from April 2017.

There will be no change for off-payroll workers in the private sector, although this could change in the future. 

Direct Recovery Debt
marketing | 3 August 2015
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Amid controversy over the Summer Budget four-pronged attack on the contracting sector, a separate and potentially troublesome government crackdown has gone relatively unnoticed.

Contracting will continue to thrive, despite the chancellor’s pick pocketing.
marketing | 10 July 2015
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Following George Osborne’s Budget speech there’s been a lot of conjecture and analysis of what the changes will mean for the contracting industry. Now that the dust has settled and the numbers have been crunched, there’s no getting away from the truth of the matter – it’s not good news, despite the excitement of Ian Duncan Smith. However, it’s certainly not all doom and gloom and changes to how contractors are taxed won’t diminish the growing demand for their skills.

Self-employed welcome Chancellor’s ‘screeching’ U-turn

Chancellor Philip Hammond has been forced to make a ‘screeching’ U-turn on National Insurance contributions (NICs) for the self-employed.

In his budget statement last week, the Chancellor said that he wanted to increase Class 4 NICs, which are only paid by self-employed workers, by two pence in the pound in 2019. 

Following heavy criticism from Tory backbenchers, the media and the self-employed community, the Chancellor has dropped this policy.

The SNP leader in Westminster Angus Robertson called it a “screeching” U-turn while Labour said the move was “humiliating”. 

Umbrella.co.uk Budget Briefing
marketing | 21 March 2016
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The Chancellors fourth Budget in 12 months arrived on Wednesday and it confirmed a number of policy changes that we already knew were going to arrive. Restrictions on Travel and Subsistence tax relief for IR35 contractors and changes to the dividend tax will take effect as planned in April.

The most significant new announcement will be of concern to contractors working through a personal service company (PSC) in the public sector.

An HMRC policy document reveals that from April 2017, public sector organisations will be responsible for enforcing IR35. This marks a significant change from the current system, whereby the PSC or agency judges whether a contractor is caught out by IR35.

Effectively, this means that many more public sector contractors will fall under the remit of IR35 legislation and will receive less take home pay as a result. This change is scheduled to take effect in April 2017 following a consultation. 

marketing | 24 September 2015
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Earlier this week Chancellor George Osborne announced that the first purely Conservative Autumn Statement will take place on November 25th 2015.

The Autumn Statement has, in accountancy circles, grown to become a sort of ‘mini-Budget’. However, a lot of the announcements we’re expecting in this November’s statement are continuations and extensions of changes put forward as part of the Summer Budget.

With a little over two months to go until the next budget announcement we’ve put together a preview, analysing how some predicted changes could affect contractors in the UK. 

Summer Budget 2015: Three reasons PSC contractors should be cheerful
marketing | 27 July 2015
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Several weeks on, the contracting and freelancing sector has had time to digest George Osborne’s ‘emergency’ summer Budget. In case you missed it, the chancellor had several nasty surprises up his sleeve on 8th July as he delivered the first all-Conservative Budget since November 1996. In what was described by industry commentators as a four-pronged attack on limited company contractors, the MP for Tatton announced that: 

  • A new tax on dividends would be introduced, with a view to tackling “tax-motivated incorporation”

A review of today’s Summer Budget (8th July 2015) highlights the following key points that could affect Umbrella Company workers or contractors/freelancers who operate through their own limited company :

Personal tax

Employment intermediaries and tax relief for travel and subsistence – As announced at March Budget 2015, the government has published a consultation document alongside the Summer Budget on detailed proposals to restrict tax relief for travel and subsistence for workers engaged through an employment intermediary, such as an umbrella company or a personal service company. The changes will take effect from 6 April 2016. (Finance Bill 2016)

IR35 reform – The government will engage with stakeholders this year on how to improve the effectiveness of existing intermediaries legislation (‘IR35’) which is designed to protect against disguised employment. A discussion document will be published after Summer Budget 2015.

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