The Spring Statement will be delivered by Chancellor Philip Hammond to the House of Commons tomorrow. It will most likely begin at 12:30pm and last for 20 minutes with the whole debate expected to last for a couple of hours.
The Spring statement replaces the old Autumn statement after the Budget was moved from Spring to the Autumn last year. This means there is only one major fiscal event per year – the Autumn Budget. This means that tax changes will only tax place once per annum, bringing the UK more into line with international markets.
When Mr Hammond explained the thinking behind the move back in 2016 he said “no other major economy makes hundreds of tax changes twice a year, and neither should we.”
No major tax or spending rises are expected, nor will there be any red box or official document. The usual list of taxes imposed on beers, tobacco, fuel etc will not feature either.
The Chancellor will focus on the state of the public finances and will set out the Treasury’s response to the Office for Budget Responsibility (OBR) economic forecasts which will include the projected GDP growth and also borrowing for the UK government in future years. This is likely to include what impact Brexit will have and the Brexit divorce bill.
The health of our economy will of course have a bearing on government tax policy, which will filter down to impact on contractors, freelancers and the self-employed. So bad news for the economy could be bad news for contractors, who have suffered in the past from changes to taxation policies.
After the government’s response to the Taylor Review in which the Department for Business, Energy and Industrial Strategy (BEIS) welcomed the idea of regulation of umbrella companies and other intermediaries in the contracting supply chain, thus making the task of choosing a compliant and ethical provider much easier.
It is anticipated that the government may decide to publish its consultation on extending the IR35 reforms to the private sector, either on Spring Statement day or soon after. The consultation was expected early in 2018, so surely it is a matter of ‘when’ not ‘if’ we see a private sector rollout. The only thing we don’t know is the date for implementation, although April 2019 seems highly likely.
What is clear for contractors, freelancers and the self-employed is that no news could be good news and a dull Spring Statement will be widely welcomed, but contractors should be on their guard to expect something that will impact on them.
If you’re concerned about IR35 it may be a good idea to invest in our Tax Enquiry and Legal Expenses insurance. Call our team today for details and a quote on 0333 321 1403