Our expectations of the Autumn Budget (November 2017)
With the Chancellor due to present his Autumn Budget to Parliament on 22nd November 2017, we have outlined what we expect (and hope) to see for the self-employed. In response to the current climate of uncertainty and instability, and despite the fact that the last Budget was only six months ago, Philip Hammond is reportedly planning a “bold” Budget. Following the publication of the Taylor Review earlier this year, we do expect to see changes focussing on independent workers. These are our predictions:
As well as more general pension rates, many are expecting the Chancellor’s focus to be on pensions for the self-employed too. Given that a study by the FCA showed the impact of non-traditional employment (and therefore the lack of auto-enrollment) on many UK adults, the Budget may follow the Taylor Review’s recommendation that the self-employed are auto-enrolled through self-assessment. It would then be up to the indie worker to opt out, and otherwise the automatic pension scheme would acquire 4% of their income.
After the last (somewhat disastrous) attempt to increase Class 4 NICs, back in the Spring Budget, you might expect the Chancellor to approach this area with more than a little trepidation. Philip Hammond indicated at the time that this proposal might be revisited, though, and self-employed NICs are reportedly back on the list of measures. The infamous U turn may yet go full circle, but this increase would put further pressure on already struggling indie workers.
This seems to be one of the most ‘rock and a hard place’ areas, with a delicate balance needed to attract and retain business in the UK - especially post-Brexit. Back in 2016, the government pledged to reduce the corporation tax rate from 20% to 17% by 2020, and it was reduced to 19% from 1st April 2017. What the next step will be is, it seems, anyone’s guess.
IR35 in the private sector
A possibility that concerns many contractors is that this year’s changes to IR35 in the public sector might be be rolled out across the private sector. Some feel that the government will allow a little time for the public sector changes to settle out, before introducing it to the private sector too, so IR35 may not appear in this Budget. Given that there is still confusion over IR35, we would call for clarity on the current situation, and consultation with those affected, before taking further steps.
What would we like to see?
We asked you what you’d like to see emerge from the Autumn Budget, and you delivered some great ideas:
- A version of the USA's Freelancing Isn't Free Act to tackle late payments, (perhaps an extension of the Prompt Payment Code)
- Legislation to make agencies disclose their margins
- Abandoning IR35 in public sector (and not extending it to private sector)
- Seed funding for Bread Funds and other similar schemes
- A freelancing limited company
- Extending the Minimum Income Floor exemption to two years minimum, plus a review of the whole Universal Credit system to ensure it does not penalise the self-employed
Whatever the outcome tomorrow, we’ll be sure to continue flying the flag for indy workers. Let us know your thoughts through Twitter or Facebook - we’ll be live tweeting through the day, and would love to hear from you.