Limited company contractors and Umbrella Company Employees may not have identical concerns, but both will be speculating about what the chancellor has in store for them in his forthcoming budget.
Contractor advisory firm Qdos has offered some informed guesses on what Mr Osborne’s red box might hold for the UK’s professional contracting community.
The company expects further clarification on IR35 regulations as they apply to office holders. The rules were recently changed; however, according to Qdos, the current judicial definition of what the term ‘office holder’ means is open to wide interpretation in the absence of further clarification from HMRC. The PCG has submitted a written request to the chancellor asking for further guidance for off-payroll workers in the budget; this is an issue that Qdos considers to be essential.
As far as income tax is concerned, Qdos says that the personal allowance has already been raised to £9,440 for the coming financial year. In previous statements, several Coalition spokespersons have declared that personal income tax allowance should ideally rise to £10,000 before 2015. Qdos anticipates, however, that any changes included in the chancellor’s 2013 budget statement will favour low-income employees.
Directors of limited companies can expect a cut in corporation tax to 21% from April, which is a measure that was flagged up by Mr Osborne in his Autumn Statement. Qdos also anticipates that the March 2013 budget may be the occasion for a much-speculated change to a single-rate corporation tax.
Under the circumstances, perhaps the best Umbrella Company Employees can hope for is that their living standards will not be eroded.