The Budget For Contractors – It could have been a LOT worse!

Of course our expectations were low, but even so it seems as though our contractors  seem relatively  relieved with the outcome of the recent emergency budget. Of course we  were expecting the swinging  Public Sector cuts, and the increase in VAT and Capital  Gains Tax, but how about the 1% reduction in  small companies tax rate, the £1,000  increase in basic personal tax free allowance and the increase (+  £21) in Employer NI threshold?

But perhaps the most important news for our contractor community is that IR35 is to be fundamentally reviewed, if not abolished all together! In an interview with the Telegraph, Small Business Minister, Mark Prisk, said “We want to make sure that we could undertake a comprehensive review of small business taxation in a way that makes the need for the current IR35 legislation redundant. But we want to make sure whatever we change is a lasting settlement. One of the problems with IR35 is that it’s a constantly changing set of rules.” Please see here for further commentary on this critical interview or here for all the other headlines on this ground-breaking budget and a calculator to check how this budget will affect you personally. Finally, if you’re really bored or having trouble sleeping you can read the full budget by clicking the logo to the right…