Today’s Autumn Statement 2015 was a hotly anticipated event. The Chancellor was expected to confirm harsh measures that contractors working on a contract for more than one month would have to be put onto their client’s payroll.
Thankfully, George Osborne did not confirm any such plans and contractors can rest at ease. Our blog will guide you through the major announcements made in the Autumn Statement 2015 and explain how these changes might affect you.
Travel and Subsistence
George Osborne has announced the end of Travel and Subsistence claims for contractors working through umbrella companies. So anyone working via an umbrella company will be severely restricted on these expense claims and the tax relief associated with them.
Individuals working through PSCs (Personal Service Company) where IR35 legislation applies will also be affected. This will take effect from 6 April 2016.
U-turn on Tax Credits
Osborne has made a u-turn on his previously proposed tax credit cuts; these plans to cut working tax credits and child tax credits were strongly opposed by the House of Lords. Osborne has made the decision to reverse his plans on these tax credit cuts. His reason being that “Tax credits are being phased out anyway as we introduce universal credit”
This is good news for the time being and means many hard working families will continue to receive their much-needed tax credits.
The Government has stated that more than one million jobs will be created in the next five years. This is great news for unemployment rates, fantastic for contractors looking for new roles and positive news for the UK economy.
So far the Midlands has experienced the strongest job growth, increasing three times faster than London and the Southeast. The Southwest has recorded the highest employment rate.
The continuation of the Northern Powerhouse agenda represents great news for contractors across the UK, ensuring that growth outside London contributes to balancing the economy.
- NHS will receive half a trillion pounds in funding. By 2020, this will provide:
- 800,000 more operations and treatments
- 5.5 million more outpatient appointments
- 2 million more diagnostic tests
- and plans for 7-day access to hospital services
Personal Tax Returns to go digital
Osborne stated that in the “digital age” there should be no need for paper processing of Personal Tax Returns. This will make Personal Tax Returns simpler and quicker to complete. With this change, Capital Gains Tax will need to be paid within 30 days.
- The Government plans to raise a budget surplus by 2019-20 of £10bn
- Schools and foreign aid remain protected
- Pensions and tax relief on pension contributions will remain untouched and further announcements are expected in Budget 2016
- It’s not yet known by how much; however a fuel duty rise is expected and could be announced and confirmed in the Budget in 2016
- New rates of Stamp Duty will apply to the purchase of additional properties, such as buy to let and second homes, at a rate of 3%