Recently appointed UK Chancellor Rishi Sunak’s first Budget on 11th March was greeted with both pleasure and discontent from the country’s independent professionals.
While a historic stimulus package to help freelancers and small businesses through the coronavirus outbreak was widely welcomed, there was despair at the news that the government’s controversial private-sector IR35 reform would be going ahead from April.
What’s the positive news for independent workers in Britain?
Concerns about the potential effects on the UK economy of the Covid-19 pandemic inevitably dominated much of the conversation surrounding the Spring Budget. Sure enough, Sunak moved to reassure UK plc with a hefty set of measures that should help to protect contractors’ incomes.
Chris Bryce, CEO of the Association of Independent Professionals and the Self-Employed (IPSE), described these plans as “very welcome – and in line with what IPSE has been calling for.”
He added: “It is absolutely right that the self-employed should get financial support if they become ill or have to self-isolate because unlike most employees, they do not have access to sick pay.”
There was also some positivity from the contracting industry in response to the Chancellor’s decision to merely reduce, rather than remove Entrepreneurs’ Relief (ER). Indeed, experts cited by the ContractorUK website went as far as describing the lowering of ER’s lifetime limit to £1 million as “fair”, “positive” and even “contractor-friendly”.
Refusal to halt IR35 changes, however, spells gloom for many workers
Sadly, for all of the warmth that some aspects of the Budget were met with, it was not an occasion of great glee for a significant proportion of the UK’s independent professionals. This is due to the government having quietly confirmed that it will go ahead with IR35 reforms set to hit the private sector from 6th April, despite repeated calls for such plans to be reconsidered.
While the Chancellor did not mention the off-payroll changes in his Budget speech, the accompanying Budget ‘red book’ outlined that they would proceed without delay.
The book stated: “The government believes it is right to address the fundamental unfairness of the non-compliance with the existing rules, and the reform will therefore be legislated in [the] Finance Bill 2020, and implemented on 6 April 2020.”
However, Julia Kermode – CEO of the Freelancer and Contractor Services Association (FCSA) – said the absence of IR35 from the Budget speech was “insulting” to the contractors, trade bodies, MPs and other stakeholders that had previously aired their concerns about the changes.
“I am shocked that he made absolutely no mention of IR35 or the off-payroll reforms in his Budget speech, except perhaps in his veiled comment with regards to dealings with tax avoidance and compliance when introducing his public sector spending plans.”
Bryce, meanwhile, said the decision to go ahead with the reforms was “catastrophic” news for the UK contracting sector. He condemned the government’s IR35 review as “recklessly inadequate”, pointing out that it took less than two months, was not independently chaired and “its recommendations were ultimately little more than superficial tinkering.”
Allow us to help you to navigate the Budget’s implications in the months ahead
Whatever the Spring Budget means for you, your income and your future as a contractor, when you are looking at GEO and PEO firms that can assist you through the challenges of the coming months and years, there’s no need for you to look further than Link Global Management.
Call +44 (0)203 829 7221 or email email@example.com today to learn more about how we can work alongside you to enable you to get the very best out of your career as an independent professional throughout 2020 – and beyond.