13 March 2018 was quite a day, isn’t it?
Phillip Hammond revealed, in the first ever Spring Statement of the country, that the health of the country’s economy has never been better.
In case you missed the speech, here are a few highlights from Tuesday:
- Employment has increased by 3 million since 2010.
- The OBR predicts the inflation rate to go down in the next 12 months
- Wages to rise faster in the next five years.
- Borrowings have reduced by three-quarters since 2010.
- £95 million in funds have been allocated as a part the UK’s digital connectivity.
- The Chancellor revealed plans to support the working class of the UK to get the skills they need, which includes extending the current tax relief support to the self-employed and employees that sponsor their own training.
- More pay for the NHS staff anticipated if management and workers agree on pay is expected. This is a refreshing thought after years of pay freezes and below inflation wage increases that the NHS staff has endured previously.
The Chancellor confidently concluded in his 15-minute long speech by stressing on the UK becoming a beacon of enterprise and innovation, a nation that is confident that its best days lie ahead.
But it looks like contractors may have to wait a little longer to know the fate of IR35 in the private sector.
The Spring Statement has conveniently left that bit out – something that wasn’t anticipated by industry experts. The private sector contractors are already frustrated over the legislation that may get implemented from April 2019; and now the exclusion of IR35 in the Chancellor’s speech simply denies them of a better idea of timescales.
But why did this happen? There are two possibilities:
- The Chancellor could have finally taken heed of the implications IR35 reforms had on public sector contractors, and decided to drop legislation in private sector altogether.
- Till late last month, the government was evaluating the impact of IR35 has had on the public sector. It could want to avoid repeating the mistakes made in the public sector reforms.
Remember how much chaos HMRC’s Check Employment Status for Tax (CEST) tool caused in the contractor community the beginning of 2017? It still needs to be addressed as the CEST tool fails to consider mutuality of obligation (MOO), which is one of the key tests of employment.
If the reforms are to arrive in April 2019, the government is clearly running out of time. The sooner they offer clarity to the contractors and agencies over the matter, the better. There may be further information released in due course. Let’s hope it is in favor of the contractor sector.
Until then, grab your free copy of the Spring Statement and keep yourself updated on the changes to be implemented.
In case you have any queries on how Spring Statement will affect you professionally, please write to us on firstname.lastname@example.org or call us on our Tax Helpline 020 3507 0022. The Bradleys staff will be happy to navigate you towards a direction that is perfect for you.