Contractors' advisers size up Budget 2016

A spending cuts alert by the chancellor ahead of this month’s Budget 2016 has not subdued contracting experts, who have shared their hopes for March 16th with ContractorUK.

For its potential to hit both umbrella and PSC contractors, April’s T&S legislation must be where George Osborne rethinks, says CUK’s Forum Adviser of the Year Lisa Keeble.

“I would like to see a revision… [so] recruiters and umbrellas won’t have to work out how to provide ‘evidence’ to HMRC that something completely intangible - ‘SDC’ -  doesn’t exist.

“And if they can work out how to get such evidence, how they will prove it’s not ‘fraudulent’” should also be covered in the revision, said Keeble, boss of ContractorUmbrella.

Since her comments, an update by umbrella trade body AUCAE indicated yesterday that an amendment to the T&S legislation in Budget 2016 is at least a prospect.

The trade body’s Lucy Smith wrote: “It seems as though it [the T&S legislation] will be going ahead [from April 6th 2016] although possibly with last-minute amendments.”

Formal guidance on the legislation is already expected by AUCAE, which following a meeting with HMRC has said that it should be published sometime before the end of March.

Although that means Mr Osborne could use his eighth Budget to unveil the guidance, March 16th is actually the “perfect opportunity” to help contracting in 10 other ways, believes contractor group IPSE.   

“The government… [should] start following through on the [ten] recommendations laid out in Julie Deane OBE's independent review of self employment,” said IPSE’s Andy Chamberlain.

“One such recommendation is enhancing maternity pay for the self-employed. Under the current system, women contractors can end up receiving much less than their counterparts in employment – and employment status should never be a barrier to choosing to have children.”

In November, IPSE expressed surprise that Autumn Statement 2015 did not contain the government’s response to the IR35 ‘discussion document,’ designed to improve the effectiveness of the rule for the exchequer.

Some four months later, the government has still not published its response even though a follow-up consultation was scheduled to launch 'after September 2015.' All the government has said on the issue is that it “continues to be interested” in IR35.

Another development on IR35 that appears to have slipped from the government's original timetable is the programming and release of a new ESI tool, which Treasury minister David Gauke had spoken of improving in time for April 2016.

But now the date for the tool is “spring 2016” and even then, it will be only a beta version. Advisers on IR35 seem to have got wind of these delays but aren’t complaining.

Asked what one thing she wants to see in Budget 2016, and what one thing she expects to see, status expert Kate Cottrell replied: “My answer is the same to both – nothing about IR35.”

Her comments come in the same week that when quizzed by the BBC about his Budget, Mr Osborne said Britain “may need to undertake further reductions in spending because this country can only afford what it can afford.”

Editor’s Note: Further reading on Budget 2016:

Osborne tipped to take away tax-free lump sum

A nest egg cap by George is April’s certainty

NHS boss hits personal service companies

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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