Autumn Budget 2017: a contractor's cash review
But it’s actually turned out that “no news is good news” on the personal finance front -- not on the business operational front -- for such freelance consultants, writes Jason Powell, CEO of CMME.
So yes, the second ever Budget yesterday from chancellor Philip Hammond saw a little relief around the edges for some. There were smatterings of help for car drivers (fuel duty frozen); younger contractors who take the train (rail fares to be cut by one-third for 26-to-30 year-olds), and whisky drinkers (a £1.15 price drop per bottle is incoming). Hic!
And yes, a proposal or two that may affect contractors with a buy-to-let. Yet not until the very distant future. A promise to consult on barriers to longer tenancies in the private rental sector, for example, and how landlords might be “encouraged” to offer such tenancies to renters who want the extra security.
Rates/allowances moving up
But fortunately, there were no brazen raids on the fundamentals of the financial arrangements contractors tend to have in place, like buy-to lets, but extending to other investments too, like ISAs and pensions.
It seems the cautiousness of the chancellor that his Whitehall peers have pointed out prevailed. For example, Mr Hammond did confirm the already floated increase on the High Rate Tax Threshold to £46,350 per annum. And he helpfully notched up the personal allowance to £11,850 a year for April 2018.
The chancellor’s boldest personal finance move, perhaps, was the removal of SDLT for first-time buyers on properties of up to £300,000. It certainly won one of the loudest cheers during his televised speech yesterday. For contractors however, this welcome news for first-time buyers (even if they’re in London, where the first £300k of the purchase price will be SDLT-free)) should be tempered by the fact that, on the whole, it is the business community who will likely pick up the tab.
Bigger fish to fry?
But enterprise, no matter its size, won’t complain too loudly. They suffered no adverse reforms to pension allowances, tax reliefs, the EIS or even the VCT tax relief, as was speculated. And there were no changes to the tapered allowance. A lucky escape? Perhaps. But bear in mind, the last big personal finance announcements from Mr Hammond were only six months ago. And right now -- even more than back then -- the chancellor’s focus is on Brexit. No news might not only be good news for contractors wanting to shore up their bottom line; it’s probably agreeable to the Treasury boss too. His concentration is on the bigger prize, and being distracted by committing to the likes of a rerun National Insurance Contributions hike (the one that never was!), would be the ultimate wooden spoon. So it’s ‘as you were’ for Mr Hammond and largely, it’s the same forecast for your finances as a contractor.