UK Contractors – As you were, for now at least

By Art on November 26, 2015

I think there were are few sighs of relief around the country yesterday after the chancellor finished giving his autumn financial statement to parliament. For the past few weeks there has been plenty of reports of doom and gloom from the various media channels suggesting that the end was nigh for contractors and freelancers due to new legislation to be imposed by the government. However after sitting through the hour or so long speech, I was largely left wondering just how unfounded most of the reports were as George Osbourne barely said a word around contractors/contracting other than the expected additional funds HMRC are going to receive to further combat tax evasion/avoidance schemes.

Analysis is starting to do the rounds and as far as I can tell, if you are a contractor working through a limited company then it is going to be largely business as usual. The new apprentice levy is fully offset for businesses earning 3m or less and the travel and subsistence relief will be restricted for only those working through a personal service company where IR35 applies. Changes to the dividends weren’t mentioned so don’t expect anything to be any different to that already announced previously.

I previously commented on not really seeing any benefits working through an umbrella company and now with the apprentice levy, there is another 0.5% reason to not work through an umbrella. I can’t imagine those companies absorbing the levy so that’ll be passed onto their workers I suspect. Additionally going forward, if things do change around IR35 and further travel and subsistence restrictions are imposed then umbrella workers are probably going to be the first affected.

I don’t believe for one second that these are the end of the changes to the contracting workspace and I fully expect things to be toughened up further in the next year or so with stricter changes to IR35. I can also see many people transitioning from personal service companies and umbrella’s to limited companies or even taking perm roles until the dust fully settles. One thing I am actually quite pleased about with the government is that they haven’t rushed through an ill thought out bad piece of legislation that helps no-one and instead they are continuing to consult on the matters. They could have legislated some pretty harsh new rules regarding IR35 if the media was to believed but for now at least, it seems to be business as usual


Follow me on twitter @sqlserverrocks

Subscribe to my blog RSS feed

Comment on this or any of my posts or contact me directly from