The country is waiting patiently for the Chancellor of the Exchequer to deliver his Budget Report on Wednesday 24th March, particularly in light of its proximity to the expected general election in the coming months. However, contractors who are hoping for to benefit from in this Budget will probably be left disappointed. IR35 has long been a contentious issue but despite the oppositions pledge to overhaul the taxation system to make it fairer for all, it is unlikely that Alistair Darling is set to follow suit. In fact, in terms of taxation, it would appear that the only changes in the imminent Budget will be a delay in the planned rise in Corporation Tax for small businesses. Contractor groups have been lobbying on the issues relating to IR35 and compliance for some time now but, as yet, these campaigns have failed to effect change.
It seems the reason tax cuts are particularly unlikely to be announced next week is due to the massive debt currently strangling the UK’s finances. The Prime Minister has already spoken out to confirm that there is a need for the public sector to become more efficient but the likelihood is actually that this means there will be large cuts in public spending, although such announcements will probably be made after the election, therefore will be dependent on which political party is in power. As of next week, we will have a better idea of the financial position over the coming twelve months if Labour win another term.