Contractors' quick look: Autumn Statement 2013

Contracting, the self-employed and disguised employment

  • Keep IR35 in place, to reflect the government’s intention to not make any changes to the Intermediaries legislation
  • Strengthen the Agencies legislation (Section 44-47 of ITEPA 2003) to stop intermediaries avoiding employment taxes from using contrived contacts to disguise the employment of workers
  • Take forward proposals to counter the use of LLPs disguising employment relationships and tax-motivated allocation of business profits to corporate partners
  • Introduce a new power requiring taxpayers who are using avoidance schemes that have been defeated at court in another party’s case to pay the tax in dispute up front
  • Stop offshore contractors who lease equipment to oil and gas operators from using associate companies in tax havens to minimise their UK tax bill
  • Not make any immediate changes to close company loans for participators
  • Adopt  nine ‘quick wins’ on employee benefits and expenses by the end of January 2014
  • Offer current pension savers who are self-employed an opportunity to make voluntary national insurance contributions to boost their income for retirement
  • Stick to the April 2015 alignment of the main rate of corporation tax with the small profits rate
  • Shortly reveal the next steps to develop a simpler NICs process for the self-employed
  • Consult soon on the exceptional circumstances in which HMRC will allow alternative options for VAT-registered businesses unable to file VAT returns online.

Business, SMEs and industries

  • Work with industry to ensure start-ups know how to benefit from R&D tax relief
  • Halve the tax rate on early profits of energy firms exploring for shale gas
  • Ensure individuals make payments for private use of a company car or van in the relevant tax year, using incoming legislation
  • Launch a programme of wholesale guarantees for SME loans
  • Introduce a £1,000 maximum discount against business rates bills for retail premises with a rateable value of up to £50k, and offer a temporary reoccupation relief
  • Publish in December 2013 a blueprint for helping small businesses
  • Invest £5m in the National Film and Television Schools Digital village, so it becomes a “world-class training centre” to provide a “sustainable supply” of talent for digital and creative industries
  • Open a £10m competitive fund to market test delivery of superfast broadband services to the most difficult to reach areas of the UK
  • Provide extra funding to science, technology, and engineering courses at universities
  • Expand Start-up Loans so it can support 50,000 additional start-ups
  • Abolish employer’s NI for firms employing the under-21s (from April 2015)
  • Next year, explore limited tax relief for commercial theatre productions
  • Future tax exemption for employers paying up to £500 for staff medical treatment
  • Extend Enterprise Allowance until March 2016
  • Simplify corporation tax rules on associated companies
  • Support visual effects companies by reforming the cultural test in the film tax relief code
  • Reposition apprenticeships by funding employers directly, with a view to creating an additional 20,000 higher apprenticeships over the next 2 years
  • Proceed on a deal with the insurance industry to invest £25bn-plus on the UK’s transport, energy and communications networks
  •  Use £270m over five years to develop a network of Quantum Technology Centres
  • Set up an £80m fund with a 5-year lifetime to let UK scientists and firms develop space capabilities and space technology
  • Introduce a new tax relief for social enterprises.

Misc

  • Roll back green levies, allowing for a potential £50 cut to energy bills
  • Free school meals for all children in reception and years 1 and 2 in state education
  • Cap train ticket price rises with inflation, not the planned 1% rise above inflation
  • Legislate to amend the definition of a charity for tax purposes to “put beyond doubt that entities established for the purpose of tax avoidance are not entitled to claim charitable reliefs.”
  • Commitment to abolish the cap on student places
  • Develop a new IT system at HMRC for charities to register and claim tax relief.
Dec 06, 2013