Chancellor sets Budget 2020 for Wednesday March 11th
Sajid Javid has announced that Budget 2020 will be delivered by him on behalf of the Conservative government on Wednesday March 11th.
The chancellor’s scheduling positions his first Budget less than one month before the extension of IR35 reform, which the Treasury said yesterday was still set to bite on April 6th.
The clarification was needed because a review of the extension is going ahead too, concluding in mid-February, before the reform’s “implementation on April 6th”, HMT added.
'Later than many expected'
That need to shoehorn in a review may be why Budget 2020 has been scheduled “later than many expected,” says Chris James of contractor accountancy firm JSA Services.
Labour’s John McDonnell expressed a similar sentiment to the House of Commons yesterday, by saying the government setting the Budget date, "at last," was not before time.
The shadow chancellor was speaking after Mr Javid used Treasury Questions to say he intends to use his March statement to “lay the foundation of economic renewal”.
'How the dust settles'
Emily Coltman, chief accountant at FreeAgent, confirmed yesterday that it is macro-economic policy which will be on the chancellor’s mind, given that the UK's exit from Europe is now set.
“The government is probably waiting to see how the dust settles from Brexit.
“[But in terms of the contractor sector’s focus] changes have been halted at short-notice before,” she said. “So I wouldn’t write off the possibility of an IR35 [reform] deferral just yet.”
'IR35 delay still possible'
Coltman was speaking before the Treasury’s strong signs that the April 6th commencement remains intact (made in its IR35 reform review announcement), but another tax expert agrees.
“It’s still possible that [the proposed] IR35 legislation could be delayed at the March Budget,” says Carolyn Walsh, managing director of Andraste Accounting.
“Just look at the reverse VAT charge in the construction industry which was shelved last year, and MTD, and the new CIS legislation which was delayed from 2005 at the last moment by two years until 2007.”
The Freelancer & Contractor Services Association is erring on the side of caution, however:
“The sensible approach is to prepare for [the IR35] change as HMRC’s and the Treasury’s track record is to bring in significant tax changes despite any ‘review’”.
FCSA’s chief executive Julia Kermode also said: “[That means both government agencies tend to ignore] evidence or [the] common sense rationale.
“In other words, despite the lateness of the Budget, I would not be surprised if the changes come in April. [And anyway] the impact of the planned reform is already biting, with many large businesses making decisions not to engage contractors.”
'Doesn't leave long to prepare'
Advisory Brookson Legal reflected; “If the IR35 changes in the private sector do come into effect in April 2020, as planned, confirmation of the legislation in a March Budget does not leave long for businesses, recruiters and contractors to prepare.”
With this year’s Budget now scheduled, HMT said that individuals, interest groups and representative bodies could now submit a Budget representation to “comment on government policy and/or suggest new policy for inclusion”.