Autumn budget cancelled

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Budget

Contractors will have to wait until the spring to find out what tax hikes – if any – await them in the new financial year, after chancellor of the exchequer Rishi Sunak announced that the Autumn Budget has been cancelled late on Wednesday.

Given the spiraling costs of combating the covid-19 pandemic, tax rises are widely anticipated.  Mr Sunak has floated the idea of raising corporation tax from nineteen to twenty-four per cent, a move that would affect limited company contractors operating outside of IR35.  Harmonising the amount of National Insurance that employed workers and the self-employed pay has also been mooted.

Following the announcement of the government’s new Job Support Scheme, that will see both the exchequer and employers topping-up the wages of workers who have had their hours reduced, a Treasury statement said: “As we heard this week, now is not the right time to outline long-term plans – people want to see us focused on the here and now. So we are confirming today that there will be no Budget this autumn.”

One measure that can be relied upon to take effect next April is the extension of IR35 reforms, officially known as the Off-Payroll rules, to the private sector, which will see end-clients become responsible for assessing their contractors’ IR35 statuses.

“What with covid looming large and Brexit deals not done, a cancellation of the Autumn Budget is hardly surprising,” said Kate Cottrell, co-founder of IR35 investigation specialists Bauer & Cottrell.

“I think most contractors would have been outraged to be faced with any Budgetary tax increases … especially with the new IR35 private sector rules already due to come in.

“Until HMT [HM Treasury] and HMRC see the devastation caused from redundancies after the covid support packages deplete, how can they possibly make any sense of the state of the economy?”

“It’s not surprising that the Autumn Budget has been cancelled this year,” Julia Kermode, the former CEO of the Freelancer & Contractor Services Association (FCSA) posted online.

“[Fortunately] … the chancellor will give an update on government plans to continue protecting jobs through the winter.”

25th September 2020.