budget Articles

The budget announced that the National Minimum Wage will increase in October 2014. Umbrella Company employees are paid at the National Minimum Wage Rate, a reimbursement of allowable expenses and a bonus or commission based on the surplus they generate. An increase in the national minimum wage can affect lower paid contractors meaning that if they fail to generate adequate income then they may not be eligible for the whole of their tax free expenses. 

The budget specifically addressed IR35 and said the following:

As with most budgets there is good and bad news! Here we look at the changes that are most likely to effect people contracting in the UK.

If you're a contractor worried about how today's budget may affect you and your family then the good news is PayMatters will be providing a summary as it happens.

Umbrella.co.uk have reviewed the 2014 Budget Statement for any key issues affecting UK contractors.

In todays budget although IR35 didn't get scrapped there was one small bit of good news for contractors who currently get reimbursed for travel in their own car in carrying out assignments.

Instead of being able to be reimbursed tax free at 40p per mile this rate has now increased to 45p per mile (for the first 10,000 miles in the tax year).

This change comes into effect from 6th April 2011.

No huge shocks with duty increases on high value home purchases and the usual culprits: beer, tobacco and petrol!

Income Tax and Personal Allowances. No change to rates previously announced. The changes previously announced mean the following changes from 6th April 2010: