On Wednesday 25th November the Chancellor, George Osborne, will be delivering his Autumn Statement. It is expected that Contractors and Freelancers operating through Limited or Umbrella Companies will be hit hard – some are considering this to be ‘D-Day’ for the Contracting industry. Any proposed changes are not expected to come in to play until April 2016, but could this be the end of contracting as we know it? Could the Chancellor be ruining a culture that’s been around for decades?
We won’t find out for sure until Wednesday, but here is what we expect the Chancellor to announce in his Statement, and how it will affect your life as a Contractor or Freelancer.
So what are the rumours?
In an attempt to raise an additional £400m in tax revenue, it is believed the government will announce reforms to: end travel and subsistence tax relief, increase tax on dividends, cap contracts at one month and toughen IR35 legislation. It is important to note that these are currently only rumours, and the credibility of these rumours cannot yet be confirmed.
Will this affect you?
If you are a Contractor or Freelancer and operate through a Limited or Umbrella Company and take on contracts longer than one month, then the simple answer is, YES. Any one of these changes will affect Contractors and the industry as a whole, however all 4 combined could be catastrophic. If these rumoured changes were given the go ahead, Contracting as a culture would be hugely affected. The permanent job market could be flooded in 2016, making it almost impossible to get a job – unemployment figures would be through the roof!
How can you help?
Many Contracting/Freelancing bodies have launched campaigns against these rumoured changes, highlighting the need to reconsider what they believe to be calamitous to the industry (if implemented), IPSE have commented:
“IPSE has been engaging with the Government on this issue already, making clear any such change cannot be considered sensible in any way and that any such proposal should be discarded. It would make operating a freelance business almost impossible in many instances, and would cause untold damage to the UK’s economy.”
IPSE are encouraging Contractors and Freelancers to contact their MP’s to voice their concerns. They have drafted a template letter that anyone can download, to be sent to local MP’s – you can find the letter HERE. The letter can be downloaded, or copy and pasted in to an email.
Do you think on Wednesday Contracting as we know will come to an end? Join in the debate on our Twitter – @GorillaAccounts.
At Gorilla Accounting, we believe it is essential to have an accountant in the current situation. That is why we offer our all-inclusive accountancy package for just £85 +VAT per month. This includes our cloud accounting online software as well as a same day response if you contact us before 3pm. To find out more about the services we offer, get in touch on 0330 024 0406.
