Contractors working through umbrella companies and limited companies alike may support the PCG’s ringing endorsement of the recent budget.
Acknowledging that the retention of IR35 had disappointed many contractors, PCG’s Managing Director John Brazier was nonetheless upbeat about the Chancellor’s other measures. The PCG has produced a detailed guide identifying those measures which affect contractors in particular. Written by tax expert Ann Redston, Visiting Law Professor at King’s College, the document pinpoints the benefits for contractors contained in the Budget.
These include the 1 per cent reduction in the small profits rate of Corporation Tax, which is likely to help “nanobusinesses” such as freelance contractors to re-invest and expand their capabilities, as well as the increase in mileage allowance by 5p per mile and the cut in fuel duty, which comes with a new stabilizer. Freelancers who work for multiple clients across several locations will experience these reforms as a significant boost, the PCG maintains.
Moreover, the PCG applauds the identification of 10 “Enterprise Zones” across Northern and central England, offering simpler planning rules, superfast broadband and, most significantly, 100 per cent rate reliefs. These are designed to attract freelancers away from the traditional heartlands in London and the South East, encouraging to bring their talents further afield.
The £1,000 increase in Personal Income Tax Allowances also came in for praise, especially as a further £630 rise is scheduled for April next year. The measure, the PCG insists, will lessen the tax burden for many freelancers.
Summing up the report, Mr Brazier said that the budget will “make the business climate more favourable for the UK’s 1.4 million freelancers, whose flexible expertise UK plc relies on for its future growth.”