Last week’s Autumn Budget saw the Chancellor of the Exchequer, Philip Hammond deliver a number of points that may be particularly relevant to the recruitment and contracting community.
Ahead of the budget there was much anticipation with many awaiting news on key business-related topics however some of the specific points anticipated were somewhat ‘brushed over’ by Mr Hammond leaving some remaining areas of grey. Initial reaction to the budget has been mixed with positives and negatives being highlighted.
We’ve summarised some of the key industry specific points below:
This was an area of anticipation as the recruitment industry held its breath over the possibility of the IR35 review (implemented into the public sector earlier this year) being dragged across into the private sector. Very little detail was offered by Hammond in this regard however it was later printed that there was to be a consultation into how non-compliance in the private sector can be tackled effectively with the paper stating; “a possible next step would be to extend the recent public-sector reforms to the private sector”. This consultation is due to be published in 2018. Such an event could present a major headache for certain contractors therefore it is advised that responses to any proposal should be voiced at the earliest point possible.
The subject of Tax avoidance has had significant coverage this year with the introduction of new clauses into the Criminal Finance Act and major press coverage surrounding the infamous Paradise Papers amongst high profile public figures. Hammond did express the government’s determination to continue to tackle this issue, making particular reference to tackling and assessing non-compliance for offshore tax evaders, tackling double taxation relief, cracking down on online VAT Fraud as well as exploring ways that digital platforms can ensure correct levels of tax are paid.
In the budget, Mr Hammond also made reference to the Taylor Review published in July this year. The review explored modern working practices including the implications on new forms of work as well as employer’s responsibilities and the rights of workers. It was announced within the Budget that a formal response to the review will be published, exploring the case for reforms in light of Matthew Taylors findings. Particular areas to be reviewed as part of the Taylor Review appear to include; a reversal on the burden of proof when determining employment status, Zero hour contracts, Licensing across the recruitment industry, Premiums for atypical workers and the creation of a new type of status; ‘Dependant Contractors’.
A positive point to take from the budget was confirmation that The VAT registration threshold for businesses has been frozen for the next two years at £85,000. There were concerns in the contracting community that any reduction to this threshold could amount to significant cash flow issues for many affected contractors.
In what can be seen as a potential boost to the construction sector and contractors working within it, the housing market will see a substantial investment in 2018, with the chancellor offering £44 billion in funding. Such a boost in funding in this area could inevitably lead to a host of new opportunities for those contractors concerned.
At first glance it would seem that the government have decided to hold off on implementing certain changes for now, but the promises to consult and further review certain topics do suggest that more change could well be on the way.
This budget does appear to present both positive and negative points for the recruitment and contracting industry for the year ahead. We will of course continue to update on any further developments that come to light as and when we have them.