During the delivery of his statement, George Osborne proudly declared the ongoing decrease of unemployment, directly referring to the increase of the self-employed population now equalling almost 15% of the UK’s entire workforce. Despite this, the 2014 statement had a very small amount of implications for this expanding sector of the workforce. We have listed a handful of the points taken from the statement that could affect you a contractor within the upcoming year;
1. Personal Allowance Increase
From April 2015 the Personal Allowance limit will increase from £10,000 to £10,600 – a small increase but positive for Contractors all the same. This allowance will also be available to higher rate tax payers for the first time which we are sure will receive a positive reaction from a percentage of the self-employed population due to many skilled-professionals falling into this category due to high contract rates.
2. Stamp Duty Thresholds
The way in which stamp duty is paid upon properties bought in the UK has been changed overnight following the Autumn Statement delivered by Chancellor George Osbourne. New thresholds details below:
- No tax up to £125,000
- 2% tax between £125,00 and £250,000
- 5% tax between £250,000 and £925,000
- 10% between £925,000 and £1,500,000
- 12% on £1,500,00+
The newly introduced rates could encourage contractors and individuals alike to climb onto the property ladder for the first time due to the first £125,000 of the property bought being exempt from the stamp duty charge.
3. Umbrella Companies and Tax Avoidance
The Government will be reviewing and consulting the use of the umbrella supply model whereby contractors are placed on minimum wage rates purposely to avoid tax payments.
4. ISA Allowance Increased
The annual ISA limit will rise from April 2015 to £15,240 – an increase of £240.
5. Fuel Duty Freeze
The Chancellor announced that there would be a freeze on fuel duty rising. Another small yet welcomed point for all, especially those contractors who incur long journeys to travel to their place of work on a regular basis. Although some of the limits such as the personal allowance and ISA savings have only been increased by a small amount, we cannot disregard the ‘every little helps’ attitude in today’s economic climate. The Stamp Duty rates will most probably prove the biggest changes from the Chancellors’ statement and we predict an increase of first-time buyers due to these introduced thresholds. To conclude, the statement delivered no direct negative implications to the every-day, honest tax paying contractor, only the beneficial outcomes of increased tax-free rates and the Chancellor’s promise to endeavour to improve the UK’s economic plan and continue to lead the way of the G7 as the fastest in terms of economic growth.